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CONSTRUCTION 
COST KEEPING AND MANAGEMENT 



Works op Halbert P. Gillette and 

Richard T. Dana / 

Construction Cost Keeping and Management / 
Handbook of Mechanical and Electrical Cost Data 

Works of Halbert P. Gillette 

Handbook op Construction Costs (Companion Book 

to Handbook of Cost Data) (In preparation) 
Handbook of Earth Excavation 
Handbook of Rock Excavation 
Handbook of Clearing and Grubbing 
Handbook of Cost Data 

Works op Richard T. Dana 

Handbook of Construction Equipment 

By Gillette and Hill 

Concrete Construction; Methods and Cost 

By Gillette and Thomas 

Road Construction; Methods and Cost (In preparation) 

By Dana and Saunders 

Rock Drilling 

By Dana and Trimble 

The Trackman's Helper 



CONSTRUCTION 

COST KEEPING 

AND 

MANAGEMENT 



A TREATISE FOR ENGINEERS, CONTRACTORS AND SUPER- 
INTENDENTS ENGAGED IN THE MANAGEMENT OF 
ENGINEERING CONSTRUCTION 



BY 

HALBERT POWERS GILLETTE 

EDITOB OF ENGINEERING AND CONTRACTING, MEMBER AMERICAN SOCIETY OF CIVIL ENGI- 
NEERS, AMERICAN INSTITUTE OF MINING AND METALLURGICAL ENGINEERS, ASSOCI- 
ATION OF ENGINEERS, WESTERN SOCIETY OF ENGINEERS 

AND 

RICHARD T. DANA 

CONSULTING ENGINEER, MEMBER AMERICAN SOCIETY OF CIVIL ENGINEERS, AMERICAN INSTI- 
TUTE OF MINING AND METALLURGICAL ENGINEERS, MEMBER OF YALE ENGINEERING 
ASSOCIATION, CHIEF ENGINEER, CONSTRUCTION SERVICE COMPANY 



First Edition 



McGRAW-HILL BOOK COMPANY, Inc. 

NEW YORK: 370 SEVENTH AVENUE 

LONDON: 6 &8 BOUVERIE ST., E, C. 4 

1922 



•$> 



-rigS 



Copyright, 1922, by the 
McGraw-Hill Book Company, Inc. 



M 2» m 



THE MAPI.B PHE.SS YOKE! JE»A 

©GI.A653617 



/ 31 



PREFACE vSV- 

Construction Cost Keeping and Management has been pre- 
pared in response to the request of the publishers for a second 
edition of Cost Keeping and Management Engineering. The 
old book, published in 1909 and reprinted in 1916, can hardly be 
said to be out of date because it confined itself to principles 
illustrated by a number of practical cost keeping forms and 
methods but in the last twelve years some new principles of 
what may be justly called the Science of Management have been 
discovered and a great many new forms and methods have come 
into use. Therefore we have endeavored, in preparing the pre- 
sent work, to supplement the original material by what has come 
out in the evolution of the last twelve years, rejecting very little 
of the old material. 

This book, as was stated in the preface to "Cost Keeping and 
Management Engineering, " is intended to assist engineers, 
contractors and superintendents in reducing construction costs 
to a minimum. To accomplish this it is necessary to understand 
the laws or rules of management, and to have daily reports that 
show the efficiency of the men and machines employed. That 
there are any scientific laws of management will be denied by 
many men of the old school, but such a denial cannot be logically 
maintained. If there is a science of psychology, there must be a 
science of management, for management is a mental process 
that follows certain definite laws, obscure and complex at times, 
but none the less definite when once they are understood. 

Many an ordinary foreman possesses a fair working knowledge 
of applied mechanics, having acquired it by observation and 
experiment ; but such a foreman would be far more efficient as a 
manager if he also had a grasp of the theory of the principles 
that he applies. 

For example, it is of great assistance, in planning the organi- 
zation of a working gang of men, to know well the simple law 
that Work = Resistance X Distance, so as to apply this law con- 
sciously rather than to apply it intuitively as does the ordinary 
foreman. On the other hand, every engineer knows this law, but, 

v 



vi PREFACE 

due to lack of proper instruction or training in engineering man- 
agement, many engineers do not apply it when they are engaged 
in construction management. 

The science of engineering management involves, therefore, 
a knowledge of certain elemental principles that control the action 
of the human mind, combined with a knowledge of methods to 
be used in applying the principles of the science of mechanics. 

In the application of the laws of this new science of manage- 
ment, the first requisite is a record of daily performance of each 
working unit, whether the unit be an individual workman or a 
gang of workmen. This recording of the performance of work- 
men is termed cost keeping. Cost keeping, as we show in Chap- 
ter V, is, in our sense of the term, a thing entirely different 
from bookkeeping. Bookkeeping has been evolved by merchants, 
and is essentially a system for showing debits and credits. Cost 
keeping has been evolved by managing engineers, and is essen- 
tially a system for showing the efficiency of workmen and of 
machines. One of the most common blunders arises from at- 
tempts to graft a cost keeping system upon a bookkeeping sys- 
tem. The two should be kept entirely distinct, for reasons given 
in Chapter V. 

This is not the first book written on the general subject of 
cost keeping, but it is, so far as we know, the first book on cost 
keeping for managers of engineering construction in the field. 
Cost keeping systems for manufacturers differ quite materially 
from cost keeping systems for contractors or constructing engi- 
neers. The contractor is a manufacturer, it is true, but he manu- 
factures bridges, pavements, sewers, and the like, with a movaSle 
plant, out in the open air, :\nd, usually, with a gang of workmen 
picked up for each particular job. The fact that the plant must 
be installed and dismantled at comparatively short intervals, 
coupled with the fact that the plant must be frequently shifted as 
the work progresses, is alone sufficient to modify both methods 
of management and methods of cost keeping ordinarily used 
by manufacturers. Weather conditions cause still further 
modifications. 

In no book hitherto published has an attempt been made to 
present not only methods of cost keeping but the principles of the 
science of engineering management. The two are so interrelated 
that it seems best to discuss them as parts of one general subject. 

It is, perhaps, not hoping too much that a book of this sort 



PREFACE vii 

will be soon adapted for use in the engineering colleges, because, 
for every engineer who can find employment as a designer of 
machines and structures, there are ten who can find employment 
as the managers of structural operations and plants. As high an 
order of engineering is required in mastering and applying the 
laws of engineering management as is required in calculating a 
stress or in selecting the means to resist it. Moreover, the greatest 
financial rewards for engineering work go not so often to success- 
ful designers as to successful managers. This may not be as it 
should be, but it is the present condition and seems likely to re- 
main so. 

In this connection the authors would suggest that, on certain 
kinds of work performed by engineering students, each student 
should be required to report daily his own output. Thus, in field 
surveying practice, each student should report the organization 
of the surveying party, the time spent on the different operations, 
and the amount of work performed. In stadia work, for example, 
the number of " shots" taken from each station, the time required 
to take them, and the time to shift the instrument from one station 
to the next should be reported on a suitable report card. In draft- 
ing work, a similar report should be made, giving the area of the 
drawing, and, if possible, the total length of the individual lines 
drawn. 

Within the last few years a number of engineers have been 
specializing as traveling instructors, if we may so call them, in 
cost keeping and management, particularly in the field of manu- 
facturing. Several of these engineers have been astonishingly 
successful in reducing manufacturing costs; but, what is equally 
astonishing, they have found it exceedingly difficult to persuade 
many manufacturers to give them an opportunity to improve ex- 
isting conditions. The same difficulty confronts the engineer who 
proposes to reduce construction costs for a contractor. The con- 
tractor says to himself: "If this engineer can do all that he 
claims to be able to do in reducing unit cost, he would not be 
asking me to employ him, but would become a contractor him- 
self." Reasoning of this sort is fallacious in that it fails to recog- 
nize the fact that there is more to any business than a knowledge 
of how to do things. There must also be means with which to do. 
These means are, in many cases, cash capital. In other cases it is 
an organization of experienced foremen and workmen. Even 
capital cannot always buy such an organization. Years spent in 



viii PREFACE 

weeding out inemcients, and in training men, are required to 
build up any organization. The intelligent engineer recognizes 
this fact, and is not too eager to plunge into contracting on a 
large scale, even if he can secure the necessary capital. 

Finally, the world must always have its teachers— men with 
the natural aptitude and liking for the work of instructing other 
men how to do things. When this aptitude is strong, a man will 
frequently care less for a great income, with its attendant worries, 
than for an opportunity to exercise his talents. This fact is well 
illustrated in every engineering college, where professors of 
splendid mental strength devote their lives to training the minds 
of young men, and do so for a recompense in money that is piti- 
fully out of proportion to the class of work done and to the ability 
displayed in doing it. 

A knowledge of local conditions is often one of the greatest 
assets of a contractor, and this, too, comes only from years of 
experience. If an engineer skilled in the science of engineering 
management can associate himself with a contractor having capi- 
tal, having an organization, and having a knowledge of local con- 
ditions, the result is almost invariably a great reduction in unit 
costs of construction. 

Another obstacle that confronts the management engineer is 
the belief on the part of the contractor or manufacturer that he 
himself can develop and install a satisfactory cost keeping system. 
Often he can; oftener he cannot, for he is apt to be like the man 
who is his own lawyer and has a fool for a client. In this age of 
specialization, it is about as much as any man can do to keep up 
with the developments of his own specialty. This will be particu- 
larly the case with management engineering, because it is one of 
the youngest sciences. 

Cost keeping is but a means to an end. The means is the 
daily report showing what each unit of the organization has ac- 
complished. The end is the economizing of labor and materials, 
as a result of the scientific study of the cost reports and of special 
timing records of performance. We have italicised the last clause, 
because this is the thing that is usually overlooked by a contrac- 
tor who is considering employing a managing engineer. 

Cost records of themselves possess some value, but the great 
value arises from the scientific study of those records. Who will 
undertake to say that any ordinary manufacturer could have taken 
the timing records made by Mr. Frederick W. Taylor and from 



PREFACE ix 

those records have deduced the methods of producing high speed 
tool steel that revolutionized a great part of the steel working in- 
dustry? Here it was that the brains and scientific knowledge of 
the engineer came into play in interpreting the results of timing 
records and in developing a great labor saving method. 

The word engineer has the same derivative as the word 
ingenious, as is particularly well seen in the French word for engi- 
neer, which is ingenieur. It is one of the functions of the engi- 
neer to invent — to exercise his talent of ingenuity. This is true 
of the designing engineer and it is not less true of the managing 
engineer. It is this very feature of engineering that gives the 
profession a charm that is irresistible. It leads engineers to spend 
their lives working more for the benefit of humanity than for 
their own financial betterment. As a class, engineers are like all 
inventors, careless of personal remuneration, craving the gratifi- 
cation that comes from having conserved materials or from hav- 
ing increased the output of men. The management engineer, 
however, is more likely to receive a greater measure of reward for 
his services than the designing engineer, for the results of his 
work are more strikingly evident to those who employ him, to say 
nothing of the fact that he is oftener able to patent devices that 
he has designed during the process of studying how to reduce 
operating and constructing costs. 

For his efficient and painstaking labor in assisting in prepar- 
ing cost keeping cards our acknowledgments are due to Mr. 
Charles Houston. 

We owe thanks to Mr. A. D. Mellor for his assistance in the 
preparation of Chapter VII on bookkeeping. 

To Messrs. J. M. Kingsley and J. G. Breaznell we owe an 
expression of our appreciation for their very great assistance in 
arranging material and reading the proof of the present work. 

The Authors. 



CONTENTS 

Page 

Chapter I. Laws of Management 1 

The Science of Management Denned and the Scope of this 

Science 1 

The Laws of Plant Location and Design 3 

Selection of Plant 7 

The Laws of Operation 8 

The Law of Subdivision of Duties 8 

The Law of Educational Supervision 10 

The Law of Coordination 12 

The Law of Standard Performance Based on Motion Timing. . . 17 

The Law of Reward Increasing with Increased Performance ... 20 

The Law of Prompt Reward 27 

The Law of Competition 27 

The Law of Managerial Dignity '28 

The Law of Separation of Planning from Performance. . . . : . 29 

The Law of Regular Unit Cost Reports 33 

The Law of Systemic Research 38 

A Principle of Management: "Credit to Whom Credit is Due". . 42 

Chapter II. Rules for Securing Minimum Costs 45 

(1) The Sum of the Items of Unit Cost Must be a Minimum . . 46 

Importance of Daily Unit Costs 47 

(2) Express all Items of Cost as Percentages of the Total .... 48 

(3) Express the Value of Lost Time in Percentages of Total 

Cost ' 48 

(4) Keep down the Batio of Overhead Charges by Night Shift 

Work 49 

Efficiency of Night Work Dependent on Illumination. ... 50 

(5) Reduce the Cost of Attending Machines Even at the Expense 

of a Large Increase in Plant Charges 51 

(6) In Selecting Plant Consider Particularly the Unit Cost of 

Moving and Shifting it and the Cost of Lost Time .... 52 

(7) Work Every Element of a Plant to its Capacity 53 

(8) Use Every Possible Means to Avoid Accidents to Plant by 

Proper Inspection 55 

(9) Consider the Animal Body as a Machine 56 

(10) Use Low Priced Men for all Work of Mere Physical Energy. 57 

(11) Make the Sum of the Items of Work a Minimum 57 

(12) Do the Most Profitable Part of the Work First to Avoid 

Interest Charges 58 

(13) Make all Designs in the office 60 

(14) Do as Much Work as Possible in a Yard or Shop 61 

xi 



Xll CONTENTS 

Page 

(15) Transport and Handle Pieces in Groups, Each Group being the 

Unit Handled 61 

(16) Resolve Each Class of Construction into the Elements of 

Work Involved. ■ ■ ■, 62 

(17) Ascertain the Percentage of Dead Work in Convejung and 

Elevating to Determine its Relative Importance 62 

(18) Cultivate a Strong Esprit de Corps 63 

One Contractor's Method for Holding Good Men 63 

Chapter III. Piece-rate, Bonus and Other Systems of Payment. 67 

Profit Sharing 67 

Piece-rate System 67 

Bonus System 69 

Differential Piece-rate System 69 

General Plans on which the Taylor System is Based. ...... 69 

Differential Bonus 75 

Task Work with a Bonus 75 

Premium Plan 76 

' Principles Governing the Fixing of a Piece-rate or Bonus 76 

How to Fix the Wage Rate 78 

The "Stint" System 79 

Over 40 % Greater Output by Piece-work 80 

Striking Reductions in Costs by Piece-work System 81 

Application of Wage Bonus to Construction 86 

Hand Excavation on Railroad Cut 87 

Surfacing New Railroad Track 88 

Carpenters on Bridge Work 88 

Construct Concrete Arch Bridge . . 89 

Standards Should Cover Small Gang 90 

Bonus System on Yakima-Tieton Main Canal 91 

Tunnel Driving Under the Bonus System 92 

Rules for Determining Bonus, Los Angeles Aqueduct 96 

Bonus for Laborers on Paving 100 

Bonus Plans for Motor Truck Operators 101 

The Economy Bonus - 101 

Lowering per Mile Costs 102 

Four Combined Bonuses 102 

Spring and Tire Bonus 103 

Pooled No-accident Bonus 105 

The Credit System for Economy 106 

The Service Bonus 106 

Yearly Bonus with Saving Feature 107 

Systematic Raise in Wages 107 

Basis for Bonuses Must Vary with Conditions . . ..'... 107 

The Pooled Bonus . 107 

Objections to Bonuses 108 

Fixing Standards for Incentive Wage Plan 109 

Efficiency Wage Scale. 110 



CONTENTS Xlli 

Page 

Chapter IV. Measuring the Output of Workmen 112 

Subdivision of Units and Rules Therefore 112 

Units for Concrete Work 114 

Two or More Units for the Same Class of Work 115 

Uniformity in Units of Measurement 115 

Units of Transportation 116 

Recording Single Units 118 

Record Cards Attached to Each Piece of Work 118 

Measurements of Length 118 

Measurements of Area 119 

Measurements of Volume 120 

Method of Estimating Excavation Yardage Daily 120 

Measurements of Weight 121 

Functional Units of Measure 122 

Stockpile Measurements. . . . 123 

Key Units of Measure 123 

Chapter IV. Measuring the Output of Workmen 112 

Key Units on Drawings 124 

Keys Marked on Separate Members 124 

Method of Reducing Idle Time , 125 

Chapter V. Cost Keeping 128 

Objects of Cost Keeping 128 

Cost Keeping Defined 129 

Differences between Cost Keeping and Bookkeeping 129 

Why Cost Keeping Records Should Be Kept Distinct from Book- 
keeping Records 130 

Conversion Factors in Cost Keeping as an Aid to Management. . 134 

Time Keeping Defined 136 

Hints for the Timekeeper 137 

Photographs as Records 139 

Daily Cost Reports, By Whom Made 140 

Working Card Vs. Punch Card Reports 140 

Time Cards That Show Changes of Occupation 142 

Gang Report Cards 145 

Individual Report Cards 150 

Kinds of Punches to Use 150 

Size and Kind of Daily Report Cards 150 

Foreman's Diary 151 

Designing Punch Card Reports 151 

Punch Card Showing Time and Occupation of Each Member of 

a Gang 157 

Duplicate Punch Cards 159 

Record Cards for Each Piece of Work 161 

Store Keeper's Reports 161 

Reports on Materials and Supplies 163 

Checking Accuracy of Reports 165 



xiv CONTENTS . 

Page 

Cost Charts 167 

Progress Charts 173 

History and Sketches of the Work 177 

Value of Progress Chart in Sinking and Concreting Deep Mine 

Shaft 178 

Office System for Construction Work 179 

Records of Progress 179 

Bookkeeping 186 

Pay Roll and Pay System 188 

Material Record 189 

Plans, Drawings, etc. . . 190 

Method of Determining Time of Performance of Work with Special 

Application to Grading 190 

Definition of Contractor's Economical Time 191 

Equipment Warranted ' 192 

Relation of Labor Cost to Equipment 192 

Definition of Total Cost 192 

Two methods of Determining Time 192 

Determination of Contract Time 196 

Typical Examples :..... 197 

Filling. . . 198 

Excavation 198 

Economical Speed in Building Construction 201 

Effect of Slow Construction on Costs . 202 

Factors that Influence Cost 202 

Speed Limited by Supply of Materials . . 203 

Sequence of Crews 204 

Number of Sets and Re-use of Forms 206 

Distribution of Man Days. .- 207 

Chapter V. Cost Keeping 128 

Colt's Plant Completed on Schedule Time 207 

Plans and Work Start Together 208 

Schedule .215 

Progress and Cost Chart 215 

Chapter VI. Cost Keeping as Applied to Highway Construction 218 

Fundamentals of Cost Keeping 218 

Cost Elements 219 

Labor . 219 

Materials 220 

Plant and Equipment ; . . . 220 

Expense of Operation . 220 

Average Cost of Repairs -. . 221 

Charges for Time Spent in Idleness 221 

Charges for Depreciation 222 

Interest, Taxes and Insurance 225 

General Expenses 225 



CONTENTS XV 

Page 

Administration 226 

Engineering and Supervision 226 

v Fixed Charges 226 

Highway Cost Analysis 227 

Units of Measure 229 

. Essentials of a Cost System 230 

Classification of Expenditures 231 

Operation Code 233 

' Method of Obtaining Class and Operating Number from Code . . 235 

Use of Code in Operations 235 

Detail of Cost Accounts and Necessary Codes 236 

Recording Forms 241 

Materials and Supplies 246 

Daily Report of Costs 247 

Immediate Use of Cost Data 247 

Final Disposition of Cost Data 248 

Definitions of Road Operation Terms 255 

References , 258 

Chapter VII. Bookkeeping for Small Contractors 259 

Simplicity Essential 259 

Fundamental Divisions of Cost 261 

Analysis of Direct Expense Account 261 

Analysis of Overhead Expense Account 262 

Gathering Data 263 

Office Labor 266 

Field Materials 266 

Purchasing 267 

Purchase Requisition 267 

Purchase Order 268 

Receiving Slip 268 

Duplicate Bills 269 

Combined Purchase Requisition and Order 269 

Price Record. . 269 

Field Supplies 270 

Tool Record 270 

Office Supplies 270 

Plant Depreciation 271 

Interest on Plant 273 

Electricity Purchased 273 

Liability Insurance 274 

Miscellaneous Office Expense 274 

Sub-contracts 274 

General Miscellaneous Expense 274 

Distribution of Expenditures 274 

Summary Sheet 279 

Profit and Loss Accounts 279 

Equipment Account 281 



xvi CONTENTS 

Page 

Chapter VIII. Office Appliances and Methods . 284 

Time Clocks 284 

Time Clock Saves Office Work on Large Jobs ' . . 285 

Electric Job Time Recorder 287 

Time Stamp 287 

Rubber Stamps 289 

Mimeograph 289 

Adding or Listing Machines 290 

Calculating Machines • . . • 290 

Portable Typewriter 293 

Slide Rule 293 

Planimeter 293 

Graphic Charts 294 

Forms 295 

Order System by Means of a Card Index 295 

Chapter IX. Miscellaneous Cost Report Blanks and Systems of 

Cost Keeping . 300 

Cost Keeping System in its Application to Street Paving 301 

Flexible Cost Keeping System in its Application to Building- 
Construction 304 

Cost Keeping System in its Application to Sewer Work 315 

Cost Keeping on Sewer Work 336 

Cost Keeping Blanks for Building Construction 338 

The Cost Keeping System of the Aberthaw Construction Company 343 

Cost Keeping on Rock Drill Work 359 

Forms for Recording Well Drilling Costs 364 

Report Card System for Dredging Work 366 

System for Recording Costs of Dredging and Dredge Maintenance. 369 

Cost Keeping Blanks for Dredging 374 

Cost Record System Used on Flood Protection Works 379 

Forms for Breakwater Construction Including Quarrying, etc. . . . 388 

Cost Keeping on Railroad Construction 398 

Cost Keeping System of Fred. T. Ley & Co 406 

Record Card for Railway Section Foreman 414 

Cost Keeping Bookkeeping System for Pipe Line Work 415 

Cost Keeping System of the Cosmos Engineering Co 427 

Blanks for Recording the Work of Well Drills 432 

Form for Keeping Account of Cars of Materials 432 

Cost Keeping Blanks for New York State Road Work 436 

Discussion of Cost Keeping Smelting Plant, Railroad and U. S. 

Reclamation Service 437 

Equipment Inspection Report 462 

Loose Leaf Balance of Stores Sheet 463 

Chapter X. Systems of Cost Keeping 464 

Cost Accounting on Construction work— Detailed Description of 

an Efficient System 464 

Analysis 469 



CONTENTS xvii 

Page 

Code 473 

Time Keeping 479 

Work in the Office — Labor Records 487 

Material Records 491 

Cost Accounting on Construction Work — Detailed Description of 

an Efficient System 464 

Monthly Statement 494 

Monthly Comparison of Best Performances 496 

The Final Comparison 496 

The Final Summary 499 

Cost Accounting System of Construction Division U. S. Army . . 503 

Bridge Cost Record of the Illinois Highway Commission 517 

Daily Report Form 524 

Cost Recording Forms Used for Street and Sewer Work 525 

Accounting and Cost Methods for Contractors 535 

Hourly Report Sheets Used in Tunnel Construction 561 

Rules for Construction Superintendents and Foremen 561 

Ten Rules for Foremen 564 

Index 567 



Construction cost keeping 
and management 

CHAPTER I 
LAWS OF MANAGEMENT 

THE SCIENCE OF MANAGEMENT DEFINED, AND THE SCOPE OF 

THIS SCIENCE 

Webster defines the word science thus: 

Accumulated and established knowledge, which has been systematized 
and formulated with reference to the discovery of general truths or the 
operation of general laws. 

A science can not be said to exist until there is enunciated a 
somewhat comprehensive code of natural laws or fundamental 
principles. To create a science it is not sufficient to formulate 
a few principles_, particularly if those principles are themselves 
but corollaries of more comprehensive laws. Nor do a few 
scientific acts indicate that the acts have occurred because of the 
conscious application of the laws of a science. Scientific acts 
occur long before a science is developed. Scientific management 
has existed from the earliest days of industrial organization. A 
science of management, however, is of comparatively recent 
origin. 

A scientific law is a formal statement that certain consequences 
invariably follow certain causes; and, when the consequences 
and the causes are susceptible of measurement, a scientific law 
is expressible as an algebraic formula. 

A science, then, is a comprehensive code of scientific laws, 
accompanied by an exposition of the truth of the laws. An 
exposition of the application of scientific laws is often called an 
art; but an art may, and usually does, exist prior to the existence 
of a science. 

The science of management may bo defined thus: 
The science of management is a comprehensive code of demon- 
strable and formally enunciated laws for so directing the energies of 
men as to secure the most economic production of utilities. 

1 



2 CONSTRUCTION COST KEEPING AND MANAGEMENT 

A management is slightly scientific if it follows only one of the 
laws of the science of management, and it becomes increasingly 
scientific as a larger number of the laws are followed. It is not 
true, therefore, to say that any given management is not scien- 
tific, for it is scarcely conceivable that all the laws of the science 
of management are ignored by any manager. However, there 
are many degrees of scientific management. 

Management consists in directing the energies of men, but, 
since most human energies are applied through the medium of 
tools or machines, it follows that management involves study of 
the efficiency of tools, or machines. The same reasoning leads 
us to see that scientific management involves a study of every 
principle of science that relates to the particular class of pro- 
duction under the direction of the scientific manager; for, with- 
out such study human energies can not be economized in the 
greatest degree. 

The popular idea attributes to a manager only the art of 
directly controlling men, and in fact, this is the idea of many who 
profess to teach and apply "scientific management." The most 
scientific manager, however, is one who has knowledge not only 
of the psychological laws that control the action of the human 
mind, but of the physical laws that limit or assist the mind in 
accomplishing a physical result. 

The science of management usually includes four processes, or 
steps : 

First, supervising the planning of the plant. 

Second, supervising the building of the plant. 

Third, supervising the operation of the plant. 

Fourth, supervising the distribution of the products of the 
plant. 

We use the word plant to denote the tools, machines or devices 
with which men effect production of utilities, whether the utilities 
be physical entities or merely work, such as transportation, 
lighting, etc. 

The first process — the planning of the plant — is one that should 
ordinarily involve more or less inventing, and it is the process 
that engineers and inventors have had most to do with. In 
fact, their activities have been very largely confined to the 
process of planning. 

The second process — building the plant — has been mainly 
conducted by a class of men known as builders and contractors 



LAWS AND MANAGEMENT 3 

although there has always been a considerable overlapping of the 
first and second processes. 

The^ third process — operating the plant — has usually been 
conducted by "business men," and, until recent years, they have 
had only the slightest knowledge of the first and second processes. 
They have been primarily men who could "handle men," whether 
as employers or as seekers of capital with which to extend their 
operations. 

The fourth process — distribution of the product — has been 
conducted by salesmen and merchants, who have ordinarily 
understood very little of the first, second and third processes. 

It is clear that a complete science of management must contain 
laws that apply to every one of these four processes. It is also 
clear that certain of these laws will be of universal application; 
that is, they will apply to the manager engaged in designing, 
to the manager engaged in building, to the manager engaged in 
operating, and to the manager engaged in selling. It is equally 
clear that many of the laws of management can be applied only 
to one or two of the processes. Finally, it takes but little con- 
sideration to see that the manager of the first process — designing 
the plant — must usually possess a considerable knowledge of 
the three remaining processes, if the greatest degree of economy 
of ultimate production is to be secured. For example, the 
engineer who designs a railway should certainly understand the 
process of building it. It remained for A. M. Wellington to show 
the engineering world in his "Economic Theory of Railway 
Location," that the railway locator should also understand a 
great deal of the process of operating a railway, and the process 
of marketing its product, which is transportation. 

In our estimation, Wellington was one of the greatest teachers 
of scientific management that the world has produced. Other 
engineers had appreciated the relation of operating income and 
expenses to the locating of a railway — and the design of a railway 
consists largely in its location — but it remained for Wellington 
to elaborate a science of location founded on the principle that 
the best location is the one that yields the largest difference 
between capitalized gross income and the total capitalized cost. 

THE LAWS OF PLANT LOCATION AND DESIGN 

As stated before, the science of management covers not merely 
the direct handling of men but the indirect control of all human 



4 CONSTRUCTION COST KEEPING AND MANAGEMENT 

activity. Hence any complete discussion of scientific manage- 
ment should include the economic principles to be applied in 
locating and designing a plant. 

Wellington's " Economic Theory of Railway Location" is a 
scientific exposition of methods to be pursued in locating a steam 
railway — a plant for producing transportation. Unfortunately 
Wellington did not enunciate the particular law of scientific 
management that he sought to apply, but it may be derived by 
induction, and when so derived it takes this form: To secure 
maximum economy so locate and design a plant that the capitalized 
annual income from its operation shall exceed by the greatest possible 
amount the total capitalized cost of the plant. 

This may be called the law of plant location and design. 

Two terms in the foregoing law may need definition : 

To capitalize is to divide an annual income or expense by the 
rate of interest paid for the use of capital. 

The total capitalized cost of a plant is the sum of its first cost 
and the amount obtained by capitalizing its annual operating 
expense. 

Thus, if the interest rate is 6% and if the cost of constructing 
and equipping a plant is $1,000,000, and if its annual operating 
expense is $240,000, we have a "total capitalized cost" of 
$1,000,000+ ($240,000 -f- 0.06) = $5,000,000. 

It will be noted that the application of this law involves a 
study of every one of the four processes or steps that occur in 
producing a utility, that is it involves not only study of (1) 
planning, (2) building and (3) operating a plant, but (4) selling its 
product. Prior to Wellington's time, the railway locator had 
given very little attention to the operating cost and still less to 
the income from the sale of transportation. Wellington demon- 
strated that complete scientific control of the process of locating 
the most economic railway is impracticable without a study of 
operating expense and of income. Too great emphasis can never 
be placed upon the importance of this managerial principle, nor 
can too great credit ever be given to Wellington for his remarkable 
exposition of it. 

This law of plant location and design may be broadened so as 
to express one of the great fundamental principles of economics. 
The law as above stated is tantamount to a rule for securing 
the maximum profit that can be secured by skillful location and 
design of the plant. But, since the profit made in a commercial 



LAWS AND MANAGEMENT 5 

enterprise is augmented by every economy that can be effected, 
it follows that a plant should be so located and designed that, 
taken 4n coordination with other plants from which it receives 
and to which it delivers products, the total capitalized cost of 
the coordinated plants shall be a minimum. 

A railway, for example, is a transportation plant that acts in 
coordination with other transportation plants, namely the horses 
and wagons or motor trucks that deliver produce to the railway 
and take it away from the railway. Hence the locator of a 
railway should estimate the cost of hauling produce to the rail- 
way and away from it, as well as the cost of hauling on the rail- 
way; and he should solve for a minimum cost by so locating the 
railway as to secure the minimum total capitalized cost of all the 
coordinated plants — horses and wagons, motor trucks and 
railway. It is an application of this law in crude form that leads 
to the location of a railway approximately through the centers of 
gravity of producing and distributing localities. 

Stated in its broadest sense the law of plant location and design 
is this: To secure economy so locate and design a given plant that, 
taken in coordination with other plants from which it receives and 
to which it delivers produce, the total capitalized cost of the coordinated 
plants shall be a minimum. 

A wagon road, for example, should be regarded by its locator 
and designer not merely as a separate plant, but as a plant 
coordinated with other plants, i.e., horses and wagons, railways, 
etc. 

A factory should not ordinarily be located without careful 
consideration of the costs of transporting raw materials to it and 
finished products from it, yet many a factory has been located 
with very little thought given to these coordinate elements of 
total cost. Where the materials and product are heavy, such 
disregard of the law of plant location and design may be fatal 
to the financial success of the factory. 

Once the location of a plant has been scientifically determined, 
the design remains to be decided upon; and, since this is no longer 
an element affected by consideration of coordinate plants, we 
may eliminate that element from the law of location and design, 
which then gives the law of plant design: 

To secure maximum economy, so design a plant as to secure a 
minimum total capitalized cost, or, its equivalent, a minimum total 
unit cost of production. 



6 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Since it is feasible to express most costs in algebraic form, it is 
usually possible to derive a formula for the total capitalized cost 
(or for the unit cost), in which all the constants and variables are 
correctly given. When this can be done, an engineer will usually 
find it desirable to solve for a minimum value of the total capi- 
talized cost by the method of calculus wherein the first differential 
coefficient is placed equal to zero. In this way very simple 
general formulas or rules may frequently be derived for use in 
designing plants or plant elements. 

It may be said that there is no need of formally stating the 
laws of plant location and design, since their truth is self-evident 
when the significance of the language is understood. But that a 
scientific principle is self-evident when formulated is no reason 
why it should not be formulated, for prior to such formulation 
it is usually noticeable that many men frequently fail to apply 
the principle at all and many others apply it imperfectly. Large 
factories located at places remote from both raw materials and 
from markets are so often seen as to make it evident that the busi- 
ness managers who caused their location did not apply the law of 
plant location. But far more frequently seen than this error in 
management is the error in plant design that arises from failure 
to capitalize all the operating cost. Some managers are prone to 
be unduly impressed by the first cost of a plant. On the other 
hand, other managers are equally prone to invest too much in 
plant through failure to capitalize plant depreciation. It can 
scarcely be said that the foregoing laws of plant design and loca- 
tion need no verbal enunciation when so many instances of 
flagrant disregard of the laws exist as do exist today. Even 
self-evident truths are often ignored until dignified by the name of 
scientific law. This is particularly noticeable in regard to the 
fundamental law of scientific management, namely that for 
greatest economy of production the payment for services should 
be proportionate to the performance. This proposition is so 
simple as to be almost self-evident; yet it is applied in but the 
crudest fashion under existing wage systems. Indeed, those who 
would be the greatest gainers by its application — the members of 
labor unions — are usually loudest in their protest against the 
laws of management. We must, therefore, divest ourselves of 
any idea that the science of management is lacking importance 
because its laws are readily comprehended, or because some of 
them are self-evident. 



LAWS AND MANAGEMENT 7 

Selection of Plant. — In applying the foregoing to construction 
work the following rule is relevant. Use the type of plant which in 
coordination with other plant units shows the lowest unit costs. 

Giving due weight to the following items: 

1. Unit rate of output. 

This item may sometimes require the use of "uneconomic" 
plant, i.e., in order to complete certain parts of a job so that the 
work as a whole will not be delayed. 

2. Cost of operating per unit. 

The conditions on the job should be taken into consideration 
in estimating the unit operating cost. 

3. Interest on investment. 

4. Depreciation of investment. 

5. Cost of installation. 

This should include freight, drayage and cost of erecting plant. 

6. Cost of moving. 

7. Cost of removing. 

This item should include cost of dismantling plant, freight and 
drayage. 

We have seen inexperienced builders erect a tower and chutes 
for concreting a comparatively small building. The cost alone of 
erecting this tower would more than have paid the cost of placing 
the concrete by wheelbarrows or concrete buggies. Furthermore 
the work was not expedited due to shortage in labor and materials, 
partly due to mismanagement and partly to conditions which, 
although beyond the control of the contractor, were apparent 
long before the work started. 

An example where a simple-guide hand derrick was used to 
repair a masonry dam is described in Engineering News-Record 
March 13, 1919 by Charles F. Dingman. The dam, about 3 
miles from the city of Willimantic, Conn., is used in connection 
with the water supply of that city. 

Many who saw the work thought that the methods used were old 
fashioned and inefficient, but they were only adopted after much 
thought had been given to the relative costs of operating a steam 
and a hand derrick. The cost of moving a boiler and engine to 
the work, setting it in place, removing it and returning it to the 
equipment yard would have greatly offset the probable cost of 
all the labor of operating the derrick by hand, and it would not 
have been possible to raise the stones in sufficiently rapid suc- 
cession to pay for the higher cost of having an engineer constantly 



8 CONSTRUCTION COST KEEPING AND MANAGEMENT 

on duty. Furthermore, it was particularly difficult to get coal in 
this locality. 

THE LAWS OF OPERATION 

The managing of industrial enterprises, such as construction 
work in the field, is still an art, and there are few who realize that 
it can be reduced to a truly scientific basis. Nevertheless, there 
are certain underlying principles of effective management of men 
which may be expressed in the form of laws. Application of 
these laws leads invariably to a greater output on the part of 
workmen, and this invariability of result proves the scientific 
basis of the laws. The most important of them can be grouped 
under their general headings, which are as follows: 

1. The law of subdivision of duties. 

2. The law of educational supervision. 

3. The law of coordination. 

4. The law of standard performance based on motion timing. 

5. The law of reward increasing with increased performance. 

6. The law of prompt reward. 

7. The law of competition. 

8. The law of managerial dignity. 

9. The law of separation of planning from performance. 

10. The law of regular unit cost reports. 

11. The law of systemic research. 

Below are given the main characteristics of each: 
The Law of Sub-division of Duties. — Men are gifted with 
faculties and muscles that differ extremely. One man will excel 
at running a rock drill, another is better at lifting loads, a third 
is clever in the application of arithmetic, a fourth is a born 
teacher — and so through the gamut of human occupation. More- 
over, practice serves to accentuate these inborn differences. It is 
clear, therefore, that the fewer duties any one man has to per- 
form, the easier it is to find men who can do the task well. But 
give a man many duties to perform, and he is almost certain to 
do at least one of them poorly, if, indeed, all are not miserably 
attended to. Hence the following law of management: So 
organize the work as to give each man a minimum number of duties 
to perform. 

This law needs little emphasizing as to its general truth, but 
it is nevertheless ignored frequently by those who have not 
applied a scientific treatment to management. Thus, a foreman 



LAWS AND MANAGEMENT 9 

is often charged with a multitude of duties. He is expected, for 
example, to watch the workmen and spur them to action when 
slothful, to teach his men how to do their work in a more eco- 
nomic fashion, to discover and remedy defects in the machines 
and tools employed, to plan the arrival of materials at the 
proper time and in the proper amount, to keep records of daily 
performance, etc., etc. 

Fred W. Taylor was the first, we believe, to urge the subdivision 
of the duties of foremen and to have what he calls "functional 
foremen." One foreman, for example, is the machinery and tool 
foreman. It is his sole duty to study the work done by machines 
and tools, to effect improvements, to reduce delays, and to 
supervise repairs. 

Another foreman is the gang foreman. His function is to 
organize the gangs, to direct their operation, and to instruct them 
in the performance of their work. 

A material foreman is employed on large jobs. His func- 
tion is to confer with other foremen and ascertain what mate- 
rials, machines and supplies will be needed. He orders the 
materials, arranges for their shipment, and follows up the manu- 
facturing and railway companies to secure prompt delivery. 
If necessary, he sends men to the factory, to the stone quarry, 
or to the freight yard, to see to it that deliveries are made with 
dispatch. Such a man is often invaluable, for upon him may 
depend the entire progress of the work. 

According to the magnitude of the contract there may be 
different kinds of foremen, all coming in contact with the same 
men, perhaps, but all performing different functions. Such 
an organization as this differs radically from a military organiza- 
tion wherein each man reports to only one superior officer on all 
matters. 

Most industrial organizations today resemble military organ- 
izations, with their generals and intermediate officers, down 
to corporals, each man reporting to but one man higher in rank. 
There is little doubt that the present tendency in industrial 
organizations is to abandon the military system to a very large 
extent, and for the following reasons: 

A soldier has certain duties to perform, few in number, and 
simple in kind. Hence the man directly in command can control 
the actions of his subordinates easily and effectively. Control 



10 CONSTRUCTION COST KEEPING AND MANAGEMENT 

moreover, should come invariably from the same officer, to avoid 
any possibility of disastrous confusion, and to insure the instant 
action of a body of men as one single mass. On the other hand, 
industrial operations do not possess the same simplicity, par- 
ticularly where men are using machines; nor is there the 
necessity of action in mass. The military organization, there- 
fore, should be modified to suit the conditions; and one of these 
modifications is the introduction of two or more foremen in 
charge of certain functions or duties of the same men or groups 
of men. 

On contract work it is often impossible to subdivide the 
duties of men to as great an extent as can be done in large manu- 
facturing establishments. The smaller the contract, the less 
the subdivision of duties possible. In such cases, an approach 
to the ideal system of subdivision is secured not by employing 
different men for different purposes, but by a systematic assign- 
ment of duties to the same men to be performed at specified 
hours of the day or days of the week. Thus, a small gang of 
carpenters is engaged in building forms for concrete, in repairing 
wooden dump cars, and in framing and erecting trestle work. 
By timing the men, and by planning their work upon the timing 
records and the requirements of the work, this carpenter gang 
can be assigned certain hours or days for each class of work. 
Thus is avoided the intermittent and uncertain shifting of the 
gang from one class of work to another, involving not only a 
loss of time in frequent shifting but a loss of interest in work 
that is done piecemeal. Moreover, a methodical change of occu- 
pation permits a methodical record of the number of units of 
each class of work performed, and thus leads to the use of the 
bonus system of payment. 

The Law of Educational Supervision. — It is not alone suf- 
ficient to give instructions to workmen and foremen from time 
to time by word of mouth, but the gist of all important instruc- 
tions should be reduced to written or printed form. Among 
contractors the pioneer observer of this law is Frank B. Gilbreth, 
whose "Field System" is a 200-page book of rules for his super- 
intendents, foremen and others to follow. His "Brick-laying 
System" is another set of rules for the guidance of his brick 
masons and foremen. 

Among manufacturers there are many examples of those 
who have prepared more or less elaborate sets of rules to be 



LAWS AND MANAGEMENT 11 

followed, but the most interesting of these compilations that have 
come to our attention is the one furnished to its salesmen by 
the National Cash Register Co. In this book are gathered a vast 
number of useful hints and practical suggestions and arguments 
to be used in selling National cash registers. Each possible 
objection that a prospective purchaser may raise is met with one 
or more specific answers. This company not only provides its 
salesmen with a textbook but has a school for training salesmen. 
At regular intervals all the salesmen meet together and discuss 
their respective methods of selling cash registers. Any new 
suggestions that are good become subsequently a part of the 
book of instructions. Thus the combined wisdom of hundreds 
of salesmen is preserved and delivered to every salesman that 
the company employs. This plan is followed also by many of 
the life insurance companies. Railway companies have long 
made it their practice to furnish their civil engineers with printed 
sets of rules for railway location, as exemplified in McHenry's 
"Railway Location." All these are forms of educational super- 
vision, and some are very elaborate. The small contractor need 
not necessarily have a printed book of rules of his own making, 
but he can supplement some such book of rules and hints by a 
typewritten or mimeographed set of sheets containing the most 
important of his own instructions. ' In this manner the repetition 
of a costly blunder by a foreman or workman can be avoided by 
a special rule or hint, while a labor saving " trick" can be passed 
on to other men in the contractor's employ. 

In developing a system of educational supervision, the greatest 
assistance can be obtained from articles in engineering and 
contracting periodicals, for there will be frequently recorded 
labor saving methods well worthy of trial by other contractors. 
In a long article it may be only a small hint that is worthy of 
being abstracted and placed among the hints for foremen. 

In preparing a set of rules and hints, take pains to distin- 
guish sharply between what is a rule always to be followed and 
what is a hint to be followed optionally. It is well to have a set 
of rules, each with its specific number, and a separate set of hints, 
also numbered. 

The second law of management is briefly this: 

Secure uniformity of procedure on the part of employees by pro- 
viding written or printed rules, supplemented by educational sug- 
gestions or hints to guide them in their work. 



12 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The Law of Coordination. — So schedule the performance of each 
gang of men that they will work in perfect coordination with other 
gangs, either adjacent or remote. 

Perfect coordination involves the working of each man to his 
capacity all the time. This necessitates not only the organiza- 
tion of gangs of just the right size, but the prompt arrival of 
standard supplies and materials, and freedom from breakdowns 
of plant. 

An examination of almost any piece of construction work in 
progress will disclose the fact that most of the men spend a con- 
siderable portion of their time waiting either for somebody else 
to do something or for materials to arrive, before they can pro- 
ceed. The cause is improper coordination of the work. One 
gang may have too many men, and therefore may be able to 
work considerably faster than another, and be continually catch- 
ing up with it. They will then adopt a slower pace, keep seem- 
ingly busy, and manage to kill a large percentage of their working 
time. These delays are chargeable to lack of coordination, al- 
though a careless inspection of the work may seem to indicate 
that everything is going smoothly. A job can look smooth and 
at the same time be so badly coordinated as to be uneconomical. 

The necessary adjuncts to proper coordination of work are 
briefly as follows: 

1. A carefully drawn schedule of performance. 

2. Regular arrival of material and supplies. 

3. Prompt and proper repairs to equipment. 

4. The proper quality of supplies. 

The best method that has so far been devised for making 
things happen on time is first to prepare a schedule, and then 
to live up to it as far as the interruptions of the weather and 
the limitations of human nature will permit. To prepare a sched- 
ule properly, it is necessary to know how fast work can be done 
under the conditions which are to govern it. At the best, there 
will be a considerable variation to be accounted for by ignorance 
on the part of the planning department on the one hand, and by 
the interference of the elements on the other. A form of chart, 
made on tracing cloth, with various symbols to indicate the kinds 
of work to be done, has been found very useful. As the work 
progresses the performance can be checked off on the chart, and 
thus indicate whether the work is proceeding on time. Where 
the work is such as that of building construction, and there is 



LAWS AND MANAGEMENT 13 

but little storage capacity for materials, it is best to have the 
chart prepared a considerable time in advance, so that materials 
will arrive when they are needed and yet not so much in advance 
of the proper time as to require large storage capacity at the site 
of the work. 

The principal railroads now use, for preparing time tables, a 
large blackboard on which the locations of stations are repre- 
sented by ordinates and time by abscissas. Pins, over which are 
stretched threads of different colors, indicate trains, and the run- 
ning speed of each train and its direction can be noted at a glance 
from the angle made by the thread with the horizontal. The 
principle of this arrangement can well be applied to the prepara- 
tion of time schedules which can be afterward made up in more 
permanent form for record. Like the operation of a railroad, 
but more so, a piece of construction will always be ahead of time 
or behind time, and some parts may be ahead while others are 
behind the schedule. For this reason a form of chart which will 
admit of many alterations and additions is to be preferred to one 
on which changes cannot easily be made. 

On a large piece of contract work it is often not easy to have on 
hand a very large supply of material, and the progress of the work 
is thus dependent upon its regular arrival. The man whose 
business it is to distribute and handle material will have to be 
placed upon some other sort of work or laid off altogether if the 
material fail. This can rarely be done without considerable 
loss of time and impairment of the efficiency of the men. When 
a man has been handling reinforcing bars until he has become 
quite proficient in it, when he knows what sizes of bars go in the 
different elements of the work, and what lengths are called for 
in different parts of a structure, a portion of the time spent in 
educating him to this point is likely to be lost if he has to be 
unnecessarily thrown upon another kind of work, and it is very 
difficult to tell by ordinary inspection how much loss of efficiency 
is involved. By shifting men on emergency in this manner it is 
impossible to keep the work coordinated unless each department 
has more than its economical number of men assigned to it and 
a continual process of shifting takes place. 

When times are dull and the railroads are not overloaded with 
business, it is fairly easy to get railroad deliveries on time, by 
seeing to it that shipments are promptly made; while in times of 
financial prosperity, when the railroads are congested with freight 



14 CONSTRUCTION COST KEEPING AND MANAGEMENT 

some consignees are sure to suffer from tardy delivery. There- 
fore, under such circumstances, it is essential to have larger stock 
piles and more storage capacity than when the railroads are not 
busy. 

It needs no argument to demonstrate that a derailed car, or 
a broken steam shovel, or a wrecked derrick, is a sure obstacle 
to any proper coordination of the work. The best way to avoid 
break-downs is to keep the equipment in repair. Every engine- 
man on the job should make a daily report in writing of the con- 
dition of his engine when he leaves it at night, and these reports 
should be filed just as regularly as any other records on the work. 
It should be the business of some one daily to go over these 
records and call the attention of the equipment foreman, or some 
one acting in that capacity, to any trouble which may cause 
interruptions to the service. Thus the equipment foreman 
becomes responsible for a large proportion of the break-downs, 
and he will see to it that these break-downs are as rare as possible. 

Poor supplies are likely to cause disarrangement of work. 
There are few more expensive blunders than that of having the 
wrong grade of dynamite for rock work, unless it may be to 
have the right grade in the wrong condition, as when dynamite is 
frozen. 

Bad coal will upset the temper of the blacksmith and of his 
steel, thus disorganizing the drilling operation sufficiently to 
cause delays to that and to blasting. Where boilers are worked 
under an " overload" and require careful nursing on the part of 
the fireman with good fuel, bad coal will cause a startling falling 
off in performance and greatly impede the processes involved. 
A 30-H. P. boiler with the best of fuel may be worked to a 
35-H. P. rating, but then come down to a 20-H. P. rating upon 
feeding it from a shipment of slaty coal. 

Systematic inspection of supplies that have been purchased 
under specification as to quality will eliminate most of this sort 
of trouble. 

A surprising amount of the time of men and machines is spent 
in almost any work of construction waiting for something else to 
be done. The cause is improper coordination of work. Now 
while the law of coordination of work is not the first of the laws 
of management engineering it is by no means the last as we shall 
endeavor to demonstrate before we conclude these remarks. 
Perhaps the initial step toward proof is to exemplify by actual 



LAWS AND MANAGEMENT 



15 



records how much waste time, delays waiting on some other, 
construction operation may count into. We have such a record 
at hand in a report of the Isthmian Canal Commission. Besides 
giving the unit costs of all the major items of construction during 
the twelve months reported on, this report records the perform- 
ance of several of the largest plant units employed. Here, we 
shall confine our attention mainly to the one item of plant delays 
waiting for the performance of some coordinate task. We find 
that the total delays to plant and the delays due to "waiting" 
were, in percentages of the total time the plant was under pay, 
as follows: 




Delays 
waiting, 

% 



Purpose of Plant 

Rock crushers, Porto Bello 

Main mixing plant, Gatun 

Auxilliary mixing plant, Gatun 

Unloading cableways, Gatun 

Unloading derricks, Gatun 

Concrete placing cableways, Gatun. . . . 

Rock crushers, Ancon 

Sand unloading cranes, Balboa 

Mixing cranes, Pedro Miguel 

Mixing cranes, Miraflores 

Concrete placing cranes, Pedro Miguel 



27.34 
41.26 
40.57 
50.57 
50.92 
27.04 
25.80 
29.41 
27.60 
37.75 
32.56 



7.10 

33.34 
37.86 
24.21 
26.24 
17.59 



3. 
26. 



15 

14 



21.39 

8.08 

23.15 



Of the 1 1 plants recorded only one was able to work more than 
three-quarters of the time it was under pay; two were not able to 
work half the time they were under pay. Delays of one sort or 
another consumed from 25.8 to 50.92% of the nominal working 
time of the plants recorded. Delays, waiting for some coordinate 
task to be performed consumed from 3.15% to 37.86% of the 
nominal working time of these plants. In only three cases were 
delays waiting' less than 10% of the time named and in only four 
cases were they less than 20%. 

The vital significance of the figures quoted cannot be easily 
overlooked, but they nevertheless deserve emphasis. What has 
been the increased cost of concrete work at Panama, due to these 
delays? Probably no one can say exactly. No one on the other 



16 CONSTRUCTION COST KEEPING AND MANAGEMENT 

hand can doubt that it has been considerable. A cableway, or a 
derrick or a concrete mixer is not costing quite as much when 
waiting for work with steam up and the gang standing ready, as 
it is when actually carrying load but the difference is not very 
great. Every stoppage of a mixer or cableway or any other tool 
under pay costs money and adds to the unit expense of produc- 
tion. It being true that delays increase the cost of production 
then the converse is true that the elimination of delays decreases 
the cost of production. All delays cannot be eliminated. There 
will always be breakdowns of machinery and stoppages from 
other unavoidable causes, and no series of construction operations 
can be so perfectly coordinated that there will not be some wait- 
ing of one on another. Good management, however, can reduce 
the number of delays due to almost any ordinary cause and 
every reduction saves money. 

Turning to the tabulation of delays given above, attention is 
directed to the percentages in the column showing delays waiting 
on coordinate operations. This is a class of delays which is 
ordinarily susceptible of more nearly complete elimination than 
most other classes. All of the 33.34% delay of the main mixing 
plant at Gatun was waiting for cars; the same cause accounts for 
the 37.86% delay of the auxilliary mixing plant. Waiting for 
cars and barges accounts for the delays at the cableway and 
derrick unloading plants at Gatun; waiting for concrete and for 
forms accounts for the delays to the plants placing concrete. 
These are all delays due to lack of coordination. To emphasize 
the illustration still more, let us take the Gatun concreting plant. 
The cableways unloading sand and stone into the stock piles 
were idle 24.21% of their time waiting for the barges bringing 
these materials to the work; the concrete mixers were idle 33.34% 
of their time waiting for cars bringing stone and sand from the 
stock piles; the cableways placing concrete were idle 3.8% of 
their time waiting for concrete cars to come from the mixers and 
another 13.79 % of their time waiting for the forms to be placed 
which were to receive the concrete. The operations of the 
barge fleet, the unloading cableways, the material cars, the 
mixers, the concreting cableways and the workmen erecting 
forms were not in coordination. It does not concern us here to 
investigate to what extent this particular example of lack of 
coordination is excused by the local conditions; the fact sought 
to be conveyed is that imperfect coordination of sequential 



LAWS AND MANAGEMENT 17 

operations is the cause of the major portion of plant idleness at 
Panama. 

The fact that is here shown to be true at Panama will be found 
to be true on almost any piece of construction work. Workmen 
and machines spend a considerable portion of their time waiting 
for something else to be done or for materials with which to work. 
The various operations required are not in coordination. What 
are the causes of this lack of coordination? They are many, 
some of them are unavoidable but most of them can be avoided 
entirely or in great measure. Lack of a carefully drawn schedule 
of performance is one cause. There is no time table to guide 
the performance of the various working units or to disclose when 
any unit is ahead of or behind time. Another cause is irregular 
arrival of materials and supplies to the workmen and machines. 
Failure to keep plant in good repair resulting in the breakdown 
of a machine upon which workmen or other machines depend is a 
third cause. Still another cause is improper quality of supplies, 
poor steel for the blacksmith or poor coal for the boilers. The 
list of minor causes is much longer, but like those named they 
are ordinarily all susceptible of being in great measure eliminated. 

It has been the pleasure of a considerable number of engineers 
and a few engineering journals to depreciate the worth of scientific 
management or management engineering as we prefer to desig- 
nate it. When plants like those at Panama whose outputs run 
into the hundreds of thousands of units per year, stand idle under 
nearly full operating expense and in six cases out of ten for over 
20% of their time waiting on some other operation there is 
certainly opportunity for the exercise of management engineering. 
And one of the first steps in this work is to do just what has been 
done at Panama, keep a careful record of plant performance. 
It is one of the easiest things in the world to misjudge plant per- 
formance, particularly where the aggregate output per day or 
per month is large. The 35,000 to 65,000 cu. yd. output per 
month of the main concrete mixing plant at Gatun, Panama, 
seems overwhelming evidence of efficiency until we learn by 
counting its time that it stands idle 33% of that time waiting for 
cars supplying it with raw materials. 

The Law of Standard Performance Based on Motion Tim- 
ing. — Nearly every operation performed by a workman involves 
several motions, although at first sight it may often seem that 
there is but one. 

2 



18 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Frank B. Gilbreth has coined the term "motion study" 
to denote his method of observing the number and kind of mo- 
tions made by a man — a bricklayer, for example — in performing 
a given operation. His plan is to analyze the motions, assigning 
a name to each motion. His next step is to endeavor so to 
arrange the supply of materials, the position of tools, etc., as to 
reduce the number of motions and the distance of each motion 
to a minimum. 

Fred W. Taylor was the first, we believe, to adopt the practice 
of invariably studying each motion by the aid of a stop-watch. 
A large number of stop-watch observations not only give the 
average time of a motion, but, what is of far greater importance, 
they indicate what the minimum time for each motion may 
reasonably be expected to be. It then follows that the sum of 
these minimum times for the different motions represents a 
standard time of accomplishment of the entire process. Hence 
our law of motion timing : 

In the performance of every process, the sum of the minimum 
times observed for each motion gives a standard of performance 
possible of attainment under sufficient incentive. 

Harrington Emerson calls this standard of excellence 100%, 
and has developed the plan of rating all actual performances in 
percentages. Thus, if the standard time for drilling a 10-ft. 
hole in a certain rock were 60 min. and, if the actual time were 
90 min., this performance would be rated at 60 -s- 90 = 66.67%. 

In establishing a standard time of performance, the first step 
is to ascertain the unit times upon the work as ordinarily per- 
formed. The next step is, by study of the time elements and 
the local conditions, to eliminate as many motions as possible 
and to reduce the time of others, either by shortening the path 
of motion, or by accelerating the velocity of the motion. 

To illustrate by an example, we give the following time study, 
which was made by one of the authors some time ago on some 
some cableway work. Since this was done the Lidgerwood Mfg. 
Co. have completely redesigned their cableway engine and fall 
rope carriers and have introduced new features in control (not- 
ably in the Gatun cableways in Panama). Therefore, while the 
data are correct as history, they must not be taken as indi- 
cating the limit of present possibility. A considerable number 
of studies was made, but one only is given for purposes of 
illustration : 



LAWS AND MANAGEMENT 19 

Table 1. — 1908 Cableway No. 2, Handling Concrete 



^ 


Observa- 
tions 


Minimum 
time 


Average 
time 


Maximum 
time 


Efficiency 


Process 


Standard 
time 


Per 
cent. 


Rl 40 ft 

Tl 470 ft 

Fl 123 ft 

D 

Re 123 ft 
Te 470 ft 

Fe 40 ft 

L 


30 
33 
37 
37 
36 
36 
35 
28 


6.0 
31.0 
22.0 
16.8 
19.4 
26.5 
11.0 
12.0 


10.5 
47.3 
30.8 
61.7 
23.7 
37.2 
42.9 
73.2 


17.3 
63.0 
44.7 

140.4 
29.3 
64.5 
96.0 

234.0 


6.0 
31.0 
22.0 
16.8 
19.0 
26.5 
11.0 

9.4 


57.1 
65.5 
71.5 
27.2 
80.4 
71.2 
25.6 
12.8 


Totals, 1,266 ft 


144.7 


327.3 


689.2 


141.7 





Table 


2.— 1908 


Cableway 


No. 3, Handling Concrete 






Observa- 
tions 


Minimum 
time 


Average 
time 


Maximum 
time 


Efficiency 


Process 


Standard 
time 


1 
Per 

cent. 


Rl 40 ft 
Tl 470 ft 

Fl 123 ft 

D 

Re 123 ft 
Te 470 ft .... 
Fe 40 ft 
L...... 


18 
17 
21 
22 
22 
22 
20 
16 


8.0 
35.5 
25.0 
20.0 
19.0 
30.0 
18.0 
38.0 


13.6 
39.3 
39.4 
62.5 
28.5 
46.6 
29.1 
75.6 


18.2 
68.0 
77.0 

119.0 
36.0 

102.0 
48.0 

220.0 


6.0 
31.0 
22.0 
16.8 
19.0 
26.5 
11.0 

9.4 


44.1 
78.0 
55.9 
26.9 
66.8 
56.9 
37.8 
12.4 




193.5 


334.6 


688.2 


141.7 





The first column gives the abbreviations of the processes, 
distances, etc.; the second gives the number of recorded observa- 
tions on each process; the third gives the minimum observed 
time in seconds for each process in that table; the fourth gives 
the average; the fifth gives the maximum time; the sixth gives 
the minimum of all the observed times for each process. While 
this is by no means the shortest possible time in which the process 
could be accomplished, it is the shortest one observed, and has 



20 CONSTRUCTION COST KEEPING AND MANAGEMENT 

here been taken to represent standard (100%) efficiency. By- 
dividing the standard time by the average for each process the 
average efficiency as observed is obtained. This is shown in the 
seventh column. 

As a result of this time study, it was possible to make an 
estimate of the probable increase in efficiency that could be 
obtained by rebalancing the engines. A further improvement 
was discovered in the method used in signaling to the operator, 
and an estimate of the saving to be obtained in this manner was 
made. A further improvement in regard to the position of the 
operator was discovered. A collateral improvement was per- 
ceived in the line of altering the design of the towers, so that the 
cost per unit of handling materials could be reduced, and further 
suggestions of a confidential nature, which we are not at liberty 
to discuss here, were made. 

The Law of Reward Increasing with Increased Performance. — 
All payments for work should be proportionate to the work done. 
This is the fundamental law of economic production. When 
this law is ignored — and it is partly ignored to-day on practically 
every class of work — the producer ceases to take keen interest 
in his work. Under the common wage system of payment, 
one brick mason receives as much as another, regardless of skill 
and energy. Individual incentive is lacking, save as it is supplied 
by fear of discharge. When laborers, working under the wage 
system, are put at the task of shoveling earth into a wagon, each 
man seeks to do as little as his neighbor, and the slowest becomes 
the pacemaker for the rest. Such ambition as any individual 
may possess is stifled by the knowledge that his increased output 
will never be known by his employer, and consequently never 
rewarded. Moreover, an ambitious man in such a gang is 
chided by his fellows who warn him not to set a "bad example" 
by working himself out of a job. 

The wage system is responsible in the first place for lack of 
sufficient incentive to good performance, but its vicious effects 
have been greatly augmented by the stupid actions of many labor 
unions, such as the restriction of daily output, the limiting of 
the number of apprentices, the demanding of wages that have no 
relation whatever to the output of individuals, the refusal to 
work under foremen who are not also members of the union, the 
refusal to do any sort of work except that prescribed by the 
union, and the like. In the long run, all such restriction of out- 



LAWS AND MANAGEMENT 21 

put, whether due to the lack of sufficient incentive, or to the rules 
of labor unions, or to the customs of a country crystallized into 
castes such as exist in India, lead to a reward commensurate 
with the output. Summing up: The wage received becomes 
ultimately proportionate to the output. The high wages preva- 
lent in America are due neither to labor unions, as some 
profess to suppose, nor to abundance of natural resources, but to 
the fact that in America labor unions have not thus far greatly 
restricted the output of individuals except in a few trades, and 
more particularly to the fact that they have not opposed the 
introduction of labor saving machinery. In addition, American 
managers are far in advance of all others in their recognition of 
the fundamental law of management — namely, that the reward 
should be proportionate to the performance. Hampered though 
they have been by the wage system, American managers have 
been liberal in their policy of payments for work performed. In 
recognition of his share in the greater output of earth excavation, 
the steam shovel operator in the United States receives $175 to 
$250 a month. 

Within the past decade still further strides have been made 
by American managers toward a more effective recognition of 
this fundamental law of proportionate reward. Various systems 
of payment, known as the bonus system, the differential piece 
rate system, and the like, have come into more general use, and 
even the old piece rate system has received a new lease of life, 
all tending wonderfully to stimulate the energy and wits of 
workmen, because they are in accord with the law of proportion- 
ate reward. 

The average employer will grant instantly that workmen 
should be paid in proportion to performance, but does the average 
employer so pay his workmen? Does the man who shovels 
18 cu. yd. daily into a wagon receive 20% more pay than the 
man who shovels 15 cu. yd.? Does the foreman who erects a 
bridge in 15 days get any greater salary than the foreman who 
spends 20 days with a gang of the same size on a bridge of the 
same dimensions? 

While the ordinary wage system of payment is crudely based 
upon the "law of proportionate reward," few will attempt to 
mantain that it represents a logical application of that law. 
Certainly the grouping of common laborers into a general class 
whose wages are, say $2.50 per day, is far from being an appli- 



22 CONSTRUCTION COST KEEPING AND MANAGEMENT 

cation of the fundamental law of management, for among these 
laborers are men varying widely in ability and inclination to 
work. 

When thus confronted with a self evident failure to apply this 
"self evident" law of management, the average manager will 
find you forty excuses for failing to follow it. "It is impossible 
to vary wage without producing dissatisfaction." "Labor unions 
will not stand for it." "I know that men differ in output and 
in ability, but I have to work them in gangs and I can't pick out 
one from another." "You have to take the lean with the fat." 
"Theories are all right, but there are practical limits to their 
application." "I get more out of my men than my competitors 
do out of theirs." These and many other excuses leap to the 
lips in defense of the pernicious wage system. But we are 
forced to regard every such excuse as an after-thought, for there 
is scarcely one of them that does not give you its own answer the 
minute it is announced. 

Dissatisfaction among workmen is either the result of unfair 
treatment or the evidence of an unsound mind. The normal 
man is never dissatisfied when given a chance and an incentive 
to earn more money. It may be that a man has unthinkingly 
followed the mandates of a labor union and is opposed to a piece 
rate or bonus system "on general principles." He may tell 
you that theoretically it is admirable, but that experience has 
shown that employers invariably cut the rate. If this is the 
attitude — and note it keenly — the dissatisfaction of the workmen 
is not with the operating of our fundamental law of management, 
but with the failure of employers to obey that law. The work- 
man objects not to pay proportionate to performance but to 
the cuts in the price rate or bonus which short sighted and hoggish 
employers have so often made. 

When a manager excuses his failure to follow the fundamental 
law of proportionate reward by saying that he must work his 
men in gangs and that he can not distinguish the relative per- 
formance of individuals, there is more reason for considering his 
excuse, but even then it is an excuse badly in need of crutches. 
Because men must be worked in gangs on certain classes of work 
does it follow that one must mingle good, bad and indifferent 
workmen together in the same gang? Not a bit of it. Every 
employer who is really keen tries to weed out the poorer workmen, 
if men are abundant, and secure gangs of more than average 



LAWS AND MANAGEMENT 23 

ability. But how often do these same employers then proceed 
to pay more than average wages? By not doing so they show 
their complete blindness to this fundamental law of management 
which they will tell you is so self evident. 

The man who starts with a determination to apply the law 
proceeds along different lines entirely. He first puts his wits to 
work to devise ways of doing away with gang work entirely, or at 
least of reducing the number of men in each gang. Thus if a 
gang of men is engaged in shoveling earth into wagons, the 
manager is generally able to supply extra wagons and to split 
up the large shoveling gangs into small groups of, say two men to 
each wagon. Since extra wagons are provided no lost time occurs 
while loading them, and it is a matter of no consequence whether 
a wagon is loaded by two men in 20 min. or by six men in 
7 min. The aim is to reduce the large gang to smaller gangs, 
and to put the best workmen together, so that they can be paid 
according to their performance. Still further to arouse indi- 
vidual ambition it is often wise to put a dividing board across the 
wagon box, assigning one-half of the wagon to one shoveler and 
the other half to his mate. 

As a corollary of the fundamental law of proportionate rewards 
we have this: 

Group men in gangs according to their respective energies, and so 
plan the ivork as to make each gang as small as is consistent with 
efficient work. Then pay these gangs according, to the number of 
units of work done by each. 

There are many classes of work that do not admit of working 
men in small gangs, to say nothing of working as individuals, 
but the scientific manager will still persist in his efforts to group 
men according to their energy. If laborers are scarce, he will 
not discharge the poorer ones, but will group the poorer workers 
together and pay them less than the other groups of greater 
ability. But if laborers are plentiful, he will speedily weed out 
the poorer workmen, keeping only those who earn large incomes 
by virtue of their large output. 

In any event, even where large gangs must be worked, pay- 
ment of men should be based upon performance. Taking steam 
shovel work, for example, how often does one see anything given 
to the men except the standard wages? Yet every man of the 
various gangs, from the pit men to the men dumping the cars, 
is a factor in the total yardage moved. Once the character and 



24 CONSTRUCTION COST KEEPING AND MANAGEMENT 

condition of the work are fairly well known a scientific manager 
will establish a bonus on every yard in excess of a stipulated 
minimum, and this bonus will be distributed among all the men, 
prorated according to daily wages. A special bonus should be 
given to the foreman (not pro rata), for upon him rests the 
display not merely of energy but of foresight. His reward 
should therefore be exceptionally large if exceptional output is 
secured. 

Where several different gangs of men are dependent upon one 
another in securing a result, the problem of providing a reward 
proportionate to performance is obviously complicated. Take 
macadam road building, for example. There we have a gang of 
quarry men, another gang delivering rock to the crusher, a 
gang on the crusher, a gang hauling, and a gang spreading, 
sprinkling and rolling the stone. If the gang on the crusher is 
slow, an output of only 50 cu. yd. per day may result. Then 
the teams hauling the stone are unable to perform a satisfactory 
ton mileage of work, and the gang spreading and rolling is unable 
to do a good day's work. How can a manager pay bonuses to 
these separate gangs in a manner satisfactory to each? The 
square yard of macadam may be the unit in which the contractor 
receives his pay, hence his tendency will be to establish a bonus 
based upon the number of square yards laid daily. However, 
to do so is an error. The rock drillers should receive their bonus 
upon the number of lineal feet of hole drilled. The men who 
handle the rock should receive their bonus upon the yardage of 
loose rock crushed. The teamsters should be paid a bonus 
upon the ton miles or yard miles. The spreading gang should 
receive their bonus upon the cubic yards spread. The roller 
engine man should receive his bonus upon the number of miles 
his roller travels daily. In each case the effort should be made 
to select for each gang a unit of work that most closely corre- 
sponds to the theoretical unit of mechanical work — namely: 
resistance multiplied by distance. In rock drilling this unit is 
the lineal foot of drill hole. In hauling, it is the ton mile. In 
rolling, it is the roller mile. 

The result of these various units of work is the square yard of 
macadam, but the square yard of macadam is not the proper 
unit for measuring the work done by any single gang, excepting 
perhaps the gang engaged in spreading. 

The work of a steam roller is commonly reported in terms of 



LAWS AND MANAGEMENT 25 

the number of square yards of macadam compacted daily. 
Nevertheless this is a very unfair unit. On a compact gravel 
subgrade a steam roller is capable of daily consolidating several 
times as many square yards of macadam as on a sandy subgrade. 
Double the amount of water used to puddle the screenings and 
the roller will greatly increase the yardage consolidated. In 
brief the roller engine man has many more trips to make of a 
given length of road where the subsoil is soft, and where water 
is meagrely supplied. His work is more truly measured in the 
miles he travels than in the area he consolidates daily. 

If the average manager of macadam road work realized this 
fact we should see several decided changes in current practice. 
First the 10-ton roller would speedily give way to the 15-ton 
roller having proportionately wider tires and the same weight 
per lineal inch of tire, for one mile traveled by such a 15-ton 
roller is the equivalent of 1% miles traveled by a 10-ton roller. 
Second, the engine man would use the high speed instead of the 
low speed, and compact a correspondingly larger area per day. 
Third, the water tank on the roller would always be made large 
enough to enable the roller to run 5 hr. continuously, even 
when working on steep grades. Fourth, the engine man would 
see to it that no stops to take on water would occur except at the 
noon hour and at night. Fifth, the engine man would have his 
roller steamed up the moment that the working day began. 
Sixth, the engine man's every effort would be directed toward 
making a big mileage, and he would be quick to complain of 
poor coal or of anything that in the slightest degree reduced his 
mileage. 

Result? Twice as many trips over the macadam as needed? 
Precisely — and then what? Twice as much broken stone 
delivered daily to be consolidated by the roller. The first result 
of paying an engine man a bonus upon the mileage covered 
(using an odometer to measure mileage) is to stimulate him to 
an overproduction of mileage, which he should be paid for just 
the same as if it were needed. The next step is to utilize that 
mileage by increasing the amount of stone delivered daily. 

Now it may be said all this could be accomplished in other 
ways. How? Who has accomplished it otherwise? There is 
no stimulus comparable to the stimulus of paying men in terms 
of the best theoretical unit of work. The mile for the roller, the 
lineal foot of hole for the rock drill are units of this sort. 



26 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Now let us go a step farther. If a man is ready to work but has 
nothing to work with, what shall be done? Is it sufficient merely 
to pay him an hourly wage while he lies idle, and let him lose his 
possible bonus? We think not. We favor paying him for every 
hour of idle time on the basis of the total earnings he averages per 
hour when actually working. At first this seems like an undue 
penalty upon the contractor for delays due to accidents. But 
we believe that the penalty for breakdowns and delays should be 
severe. Then those who are responsible for the accidents and 
delays will receive the punishment they deserve — the punish- 
ment that will quicken them to scheming how to escape it in 
future. We have found it a good plan to dock the wages of the 
engine man on a crusher a dollar for every hour lost through 
shutdowns in excess of three hours per week, and to give a bonus 
of a dollar an hour for all time saved from the three-hour standard 
of loss. An engine man who had been losing nearly an hour a day 
for one reason or another, woke up when he was informed that 
this rule was about to go into effect. He had come to regard 
short stoppages as being a matter of course until it also became a 
matter of course that he should settle for such delays out of his 
own pocket, at least in part. One of the sprocket chains on the 
bucket elevator had been in the habit of breaking almost once a 
day. The engine man, who was an intelligent fellow, had 
blamed it upon poor material in the chain, too light a chain, and 
what not. But now he began to think. Thinking, he concluded 
to experiment a little. Perhaps the chain was too tight, and 
when a bit of stone flew out and caught between the chain and 
the sprocket wheel there was not enough slack in the chain, so 
perhaps that was why it broke occasionally. The surmise was 
perfectly correct. Why some of us, who also had intelligence, 
had not thought out the reason for the breakages of the chain I do 
not know, unless it is that we had many another thing to think 
about. By giving the engine man one thing to think about and 
a very strong incentive for hard thinking the trouble was speedily 
located. 

Using a somewhat long story to illustrate a conclusion, we 
thus come to another corollary of the fundamental law of 
management : 

Pay men for lost time not upon the basis of the hourly wage but 
upon the total hourly earnings (including the average bonus), and 
place a heavy penalty for lost time upon the man who is responsible 



LAWS AND MANAGEMENT 27 

for it, at the same time giving him a bonus for reducing lost time 
belovj a stated standard. 

Sometimes the responsible individual is an engine man, some- 
times a foreman. Sometimes a whole gang should be made 
responsible. 

If men are to be paid a bonus for excellent performance, it is 
but logical that they should incur a penalty for carelessness, 
and even for lack of quick wittedness. In the operation of 
machines there always will be some lost time, but there now is 
vastly more than there should be, and the real reason is to 
be found in the absence of sufficient incentive to reduce the 
delays. 

The Law of Prompt Reward. — Any reward or punishment 
that is remote in the time of its application has a relatively faint 
influence in determining the average man's conduct. To be 
most effective, the reward or punishment must follow swiftly 
upon the act. Hence a managerial policy that may be otherwise 
good is likely to fail if there is not a prompt reward for excel- 
lence. Most profit-sharing systems have failed, principally 
because of failure to recognize the necessity of prompt reward, as 
well as because of failure to recognize the necessity of individual 
incentive. 

The lower the scale of intelligence, the more prompt should be 
the reward. A common laborer should receive at least a state- 
ment of what he has earned every day. If, in the morning, he 
receives a card stating that he earned $3.10 the previous day, 
he will go at his task with a vim, hoping to do better. But if 
he does not know what he has earned until the end of a week, 
his imagination is not apt to be vivid enough to spur him to 
do his best. 

A daily or weekly statement of earnings, followed by prompt 
payment, is a stimulus essential in securing the maximum output 
of workmen. 

The Law of Competition. — The pleasure of a competitive 
game lies in conquering an opponent, and this follows logically 
from the fact that competitive games are an evolution from the 
primitive chase or battle. Work conducted as a competition 
becomes a game, and thus stimulates those engaged not only to 
strive with great energy but to derive keen pleasure from the 
contest. The business man who continues to pile up millions, 
long after his wealth is sufficient to satisfy every possible want, 



28 CONSTRUCTION COST KEEPING AND MANAGEMENT 

does so from pure joy in the contest to excel others engaged 
in the same business. He is following the law of competitive 
work. 

By pitting one gang of workmen against another gang, the 
spirit of contest is easily aroused. But it is impossible to main- 
tain this spirit indefinitely without following the seventh law of 
management of men — namely, by making the reward proportion- 
ate to the performance. When, however, this seventh law of 
management is observed, an added spirit is given to men by pit- 
ting one gang against another. Thus, in laying concrete by hand 
for a pavement, the best method is to have two distinct gang's 
working side by side, each gang concreting from the center of 
the street to the curb. When this is done under a bonus system 
of payment, the output is astonishing. 

Where competing workmen cannot see one another's output, 
a bulletin board should be used, whereon the number of units of 
work performed by each man or each gang of men should be 
posted. 

Convert work into a competitive game by organizing competing 
gangs of men and by posting their performance. 

The Law of Managerial Dignity. — That there should be 
anything like caste among managers seems, at first, repulsive to 
democratic principles of government, whether the government be 
political or industrial. Nevertheless, a study of the personality 
of the most successful managers usually discloses a characteristic 
of firmness coupled with a sort of austere dignity. The best 
manager is never "one of the boys." 

Managerial control reaches its acme of excellence in the 
army, and there we find class distinctions most scrupulously 
observed. The officers do not "mess " with the men, nor do they 
form close friendships with the soldiers in the ranks. 

Familiarity breeds contempt, or it breeds at least a feeling 
that the great man is not so great after all. All managers are 
under the constant fire of criticism of their subordinates, whether 
they realize it or not. The best shield that a manager can wear 
is distance. His little foibles — and all men have them — may 
thus be kept concealed. It is essential that they be concealed, 
for men of less mental endowment will always seize upon the 
little defects of greater men's character or attainment as evidence 
of lack of any real superiority. The eye of criticism is a micro- 
scope for human frailties. Being a microscope, it is wise to keep 



> LAWS AND MANAGEMENT 29 

beyond its range, so that the whole character may be viewed by 
the naked eye in its true perspective. 

Discipline in an industrial army is as essential as in a mili- 
tary organization, and it is best secured by military methods. 
This involves: (1) The social separation of the officers from 
the men; and (2) a sequence of responsibility from the man in 
the ranks to the highest officer. 

For every act on the work every man should be responsible 
to some particular man higher in authority. There should never 
be any doubt as to whom a man is responsible; but it does not 
follow that a man should be responsible to only one person, 
except for certain acts. As we have previously shown, an indus- 
trial organization may have several classes of foremen, to each 
of whom each workman is responsible for certain acts. What 
we now emphasize is the importance of not dividing the respon- 
sibility for any particular act. A contractor, for example, should 
rarely give any orders to a workman. All orders should come 
through the proper foreman. To do otherwise results not only 
in reducing the workman's respect for the foreman, but it fre- 
quently angers the foreman, who feels that he has lost dignity in 
the eyes of the workmen. 

It is often wise to change foremen from one gang to another, 
in order to preserve the class distinction between foremen and 
men. As foremen become acquainted with the men, they gen- 
erally want to be regarded as good fellows, and will then permit 
infractions of rules and a general decrease in activity. Who has 
not noticed that short jobs usually move with a "snap" that is 
not always characteristic of longer jobs? 

We may sum up thus: 

Discipline is best secured by managerial dignity, and dignity 
is best preserved by social separation of managers from subordi- 
nates and by an invariable sequence of responsibility. 

The Law of Separation of Planning From Performance. — As 
a corollary to the law of the subdivision of duties, we have the 
law of divorce of planning from performance, first formulated by 
Mr. Taylor. 

According to the old style method of management, each 
foreman is left largely to his own resources in planning methods, 
in addition to his other functions. This multiplicity of duties 
can be properly performed only by a foreman possessed of a 
multiplicity of talents. Since few men can comply with such a 



30 CONSTRUCTION COST KEEPING AND MANAGEMENT 

specification for brains, it follows that good foremen of the old 
style are rare indeed. The modern system of management con- 
sists, as far as possible, in taking away from the foremen the 
function of planning the work, and in providing a department to 
do the planning. Under planning we include inventing, that is, 
the improvement of existing methods and machines. 

A common error in management is the assumption that the 
man on the job in direct charge of the work is the man best fitted 
to plan and improve. Nothing is further from the truth. Rare, 
indeed, is the man possessed of a trained inventive faculty, and 
it requires such a faculty not only to develop new methods and 
machines but to plan the use of any machine with greatest 
economy. Nearly every piece of contract work presents new 
conditions, and this solving of new economic problems is beyond 
the power of any but the trained and skilled economist. But 
even where the problems remain identical, the, necessity of a 
divorce of planning from performance exsits, as we shall 
indicate. 

The brain is an organ that requires frequent exercise in 
doing the same thing before it becomes proficient enough not to 
suffer great fatigue. Thus, the man who is learning to ride a 
bicycle finds that half an hour's lesson has tired him more than 
10 hr. work at his accustomed occupation. Attempting to do 
something new is wearisome beyond measure, except to the mind 
whose training has been in solving new problems. Hence the 
ordinary man finds much fatigue and little pleasure in attempting 
to do his work in a fashion that differs at all from that to which 
he has long been accustomed. The mental inertia that resists 
a change in methods of performing work is almost beyond com- 
prehension, and it is found not only in the lowest type of work- 
man but in the highest. 

Repetition develops skill, and skill gives pleasure. To a 
strong man used to his work there is actual pleasure in mowing 
hay, as Tolstoi has admirably pictured in one of his novels. 
Conversely, fatigue merges into pain and is repulsive. 

In addition to these fundamental reasons why men adhere 
to precedent in their proformance, there is the fear of ridicule in 
case of failure to succeed in any new attempt. The child learns 
to speak a foreign language more rapidly than an adult not only 
because of a more "flexible tongue" but because it does not fear 
laughter at its blunders. Partial failure is expected of the child, 



, LAWS AND MANAGEMENT 31 

and it is not ridiculed. But an adult seems witless if he does 
not immediately learn the new word and its pronunciation; hence 
the laughter. So it is with every new performance. Further- 
more, a serious mistake may lead to the loss of a position, thus 
adding another reason for sticking to the "good old way." 

Finally, there is no method so fruitful in effecting improve- 
ments in methods and machines as a study of the time required 
to perform each movement of operation. A workman or fore- 
man rarely studies his own work in this manner. Hence his 
experience, upon which he is wont to brag, is like the experience 
of the swallow building its nest — an unchanging adherence to 
precedent, regardless of possibilities of improvement. 

It is a significant fact that nearly all the great inventions 
have been the product of brains divorced from the actual per- 
formance of the machines that they have invented. Eli Whitney, 
inventor of the cotton gin, was a lawyer, and not even a southern 
planter. Smiles' "Self Help" is a volume full of instances of 
important inventions made by men remotely, if at all, connected 
with the class of industry in which their machines are used. 
Nothing, therefore, is more ridiculously illogical than the com- 
mon belief that the "men behind the gun" are either capable of 
being the inventors of the gun or the ones likely to improve 
it. Yet it is this illogical belief that prevents railway companies, 
manufacturers and contractors from making hundreds of radical 
economic improvements. 

There is another difficulty, one which is most insidious and 
not generally recognized among contractors. It depends upon a 
mental peculiarity, to which we know of not a single exception, 
which becomes increasingly evident as a man's familiarity with 
the work develops. The fact referred to is this: A field chief 
can see inefficiencies in operation and prescribe remedies far more 
unerringly when his personal active touch with any one piece 
of work is intermittent than when one job is his constant care. 
The ultimate reason for this fact belongs to the science of psy- 
chology rather than engineering, and its theoretical investigation 
is not our present concern, but the fact is there and it has got to 
be respected. Coming back to a job after two or three days 
spent on another kind of work, with another kind of responsibility 
and among another set of men, things are seen that were not 
before suspected, and the prejudices of practice, as they may be 
called, are offset by the distraction of other fields, without the 



32 CONSTRUCTION COST KEEPING AND MANAGEMENT 

analytical perception having had the opportunity to grow rusty 
from disuse. 

Still another fact, equally important, equally elusvie, equally 
difficult to demonstrate to the theorist who has not had field 
experience and to the old-timer who is hide-bound by precedent, 
is this: A man, no matter who he is, can do his work better, 
vastly more efficiently, when he is being coached than when he is 
his own guide, philosopher and friend. Why this is true we will 
not here take the time and the space to discuss. It is true at a 
rifle range, on the baseball diamond, on the football field, in 
rowing, in track athletics, in the machine shop, and in field con- 
struction work. A man can steal third base better under coach- 
ing, even with the handicap of the impressions having to go 
through the mind of the coach before he can make use of them, 
a matter involving a considerable interval of time. The coach 
must know his business, of course, and have the confidence of 
the worker; and in its field application the cost of the coaching 
must not be excessive, nor need it be. A coach can act in that 
capacity to a good many men at once, and, if he be allowed to 
confine himself to just one function for a considerable tine, he 
can obtain a control of other men on this function that is aston- 
ishing. This is the basis of the employment of functional fore- 
men first developed by Taylor. 

We might multiply instances indefinitely, but it is clear from 
the above that the economic systemizing of any specific piece of 
work of any considerable size must be done by a thoroughly disci- 
plined and well trained staff under the leadership and direction 
of the best man available^ and it is further evident that if the 
services of the field chief on any one job can be made intermittent, 
visits being at reasonably short intervals, his efficiency will be a 
maximum. The superintendent in charge of the work has a con- 
tinuous responsibility and a continual care. His coach, his friend 
and his chief must have a broader and less confining field. 

Not being on the job continuously, the chief will obtain unfair 
impressions unless fortified by an efficient and well ordered cost 
keeping system. 

In agreement with the three preceding paragraphs, it has been 
found that the reorganizing of work is done much more efficiently 
by men who have not been a part of the permanent organization, 
than when attempted by an old employee on the work. This 
statement applies to large organizations as well as small, and has 



» LAWS AND MANAGEMENT 33 

been proven true on the railroad, in the shop and in the construc- 
tion field time and time again; and the fact frequently offers a 
particularly unfortunate obstacle to the employment of the best 
men for the work, because many men in construction business 
dislike to entrust their trade secrets to an outsider. As a matter 
of fact, the trade secrets on construction work that are worth 
concealing, if shaken up in an ordinary peanut shell, would make 
a distinct rattle ; but a contractor seldom likes to have his precise 
costs known outside of his own organization, lest someone else 
might have an advantage in bidding against him. He has con- 
fidence that the men in his own employ will not give away his 
figures to his business rivals and he has not the same confidence 
with regard to a rank outsider. In practice, however, it works 
out differently. The employee who has gained such knowledge 
of the business as to make his information valuable can, and often 
does, better his job by going over to another contractor. The 
outside expert is under the strictest obligation of professional 
honor not to betray to one client the secrets of another, and we 
have yet to learn of such a thing being done by men with a 
reputation to sustain. A contractor's " costs" are safer in the 
hands of his consulting engineer than in his own office. 

Summing up, we have this law: 

For maximum economy of performance, the planning of methods 
of doing work should be the sole function of a manager who is not 
a workman himself nor in direct charge of the workmen. 

The Law of Regular Unit Cost Reports. — Having planned 
a method of performance, it becomes necessary to secure daily, 
weekly and monthly reports of such completeness that a manager 
can tell, almost at a glance, what the actual and relative perform- 
ances are. This systematic reporting is more fully treated under 
the head of cost keeping. The success of nearly all large cor- 
porations, such as the Standard Oil Company, is due, in large 
measure, to a system of regular reports that put the various 
managers in constant touch with the performance of the men 
under them. Reports to be of much value must come at short, 
regular intervals, must be in the same form, and must show 
quantitative results that admit of instant comparison with prev- 
ious reports. To permit comparison there must be either simi- 
larity of conditions, or there must be a reduction to units that 
are themselves practically identical. For example, a weekly 
record of the number of yards of earth excavated and hauled at 



34 CONSTRUCTION COST KEEPING AND MANAGEMENT 

a given unit cost is usually of little or no value to the manager 
unless there is a further subdivision of units of cost. The cost 
of loading per cubic yard should be segregated from the cost of 
hauling, so that the cost of hauling can itself be expressed in the 
unit of the yard-mile or ton-mile hauled. 

The law of regular unit cost reports may be formulated as 
follows: Report all costs in terms of units of such character that 
comparison becomes possible even under changing conditions, and 
let these reports be made daily if possible, weekly in any event, and 
with a monthly summary. 

It is in the adherence to the terms of this law that managers 
of contract work in the field will find their greatest difficulty. 
First, there is the difficulty of selecting suitable units upon which 
to report costs. In pavement work, the square yard is a con- 
venient unit and the number of units is easily measured daily. 
But in reinforced concrete building construction, there is needed 
not merely the cubic foot or cubic yard unit, but many others, 
some of which are not easily ascertained every day. 

For example, the pound of steel reinforcement is one unit 
upon which reports should be made, for the number of pounds 
of steel per cubic yard of concrete differs widely. The thousand 
feet board measure in the forms is another necessary unit, and 
the square foot of concrete area covered by the forms is still 
another. Yet these and other units must be used to admit of 
any rational comparison of performance from day to day and 
week to week. 

In the evolution of scientific cost analysis five kinds of units 
were successively developed: 

1. Time units. 

2. Sale units. 

3. Dimension units. 

4. Work units. 

5. Formula units. 

The time unit of cost is the cost per unit of time, as the day, 
week, month, or year. All interest costs and most depreciation 
costs are time costs. Many other "fixed costs," such as rent, 
supervision, etc., are time costs; that is, they are a function of 
time rather than of output. Hence time units will always remain 
useful as measures of certain costs of production. 

Where the number of production units is practically a constant 
— as the weekly car-miles of a street railway system — the time 



> LAWS AND MANAGEMENT 35 

unit of operating cost may be of great value in contrasting one 
week's, month's or year's cost with another. But it is not com- 
monly the case that the number of units of product is the constant 
per unit of time. Indeed, wide fluctuations in production 
frequently occur. Therefore it early became the practice to 
express costs in terms of sale units. 

A sale unit is the unit of product in which selling prices are 
expressed; as, the ton of pig iron, the cubic yard of concrete, the 
kilowatt hour of electricity, etc. 

While the sale unit of cost is still more commonly used than any 
other, with the possible exception of the time unit, and while the 
sale unit possesses merit, it is a very imperfect criterion for judg- 
ing the cost of many products. Thus, the cost of excavation 
expressed only in the sale unit of the cubic yard means next to 
nothing unless accompanied by a statement of many local con- 
ditions. The length of haul may, and often does, become a far 
more important cost element in earthwork than all other items 
combined. Then the sale unit (the cubic yard) ceases to have 
much significance as a cost unit when taken merely by itself. 

The sale unit of freight transportation was originally the ton- 
mile. Here, too, we have an imperfect unit in which to measure 
all transportation costs. Railway track maintenance cost is less 
a function of the ton-mile than of the car-mile, and most of such 
maintenance is not a function of either. Ties, for example, decay 
as fast in an unused track as in a used track. Perception of such 
facts led to the adoption f o two kinds of cost units that are quite 
independent of sale units; (1) dimension units, and (2) work units. 

A dimension unit is a unit of length, area or volume. Thus, the 
mile of track may be used as a length unit in which to express the 
cost of track maintenance. Thus, the square yard of concrete 
surface may be used as an area unit in which to express the cost 
of forms or molds. Thus, the cubic foot of building content may 
be used as a volume unit of building cost. 

Obviously a volume unit is convertible to a weight unit if the 
specific gravity and voids of the material are known. Hence 
we shall include weight units when we speak of volume units in 
this discussion. 

In selecting dimension units that are better criteria of costs 
than sale units, the instinctive aim is to choose a dimension unit 
that shall directly measure the approximate amount of labor 
required to produce the unit. The next step in the evolution 



36 CONSTRUCTION COST KEEPING AND MANAGEMENT 

of cost units was to do with more scientific precision, that, that 
had been done by instinct. That is, to select for cost units those 
that were more truly measures of the labor required in their 
production. These we shall call work units. 

A work unit is a unit that directly measures the approximate 
cost of labor involved in its production. 

If all work were done without tools, or with tools of perfect 
efficiency and costless in themselves, then the ideal work unit 
would be the foot-pound or some multiple thereof. In other 
words the work unit would be the product of some weight (or 
force) and the distance through which the weight (or force) 
moves. Even though this ideal work unit is rarely a perfect 
measure of labor costs, it is always well to have in mind the ideal 
when selecting a work unit for practical use. Thus, in selecting 
a work unit for hauling or transportation costs, one should be 
chosen that will be approximately a function of distance multi- 
plied by tractive resistance. The car-mile fulfills this condition 
better than the train-mile, for example. 

We have come now to the latest development in unit cost 
analysis, namely the formula unit, as we shall designate it. 

A formula unit is a composite cost unit made up of simple cost 
units, each of wh ch measures approximately or exactly the cost 
of a certain part of the total. 

Nearly every satisfactory formula unit is a composite of the 
three classes of units that we have discussed, namely: (1) Time 
units, (2) dimension units, and (3) work units. A formula unit 
may be itself a sale unit, or it may be some arbitrary unit that 
merely serves to sum up all the sub-units of a given kind, or of a 
multiplicity of kinds. It may be the cubic yard of masonry, or 
it may be x — an arbitrary unit. In all cases, however, the for- 
mula unit is one susceptible of expression as the left-hand x of 
an equation in which the right-hand member contains all the 
sub-units that respectively measure the corresponding costs with 
approximate correctness. 

Thus, 

x = a + b + c 

Here x is the formula unit cost which for example, may be the 
cost of a cubic yard of excavation. Then a may be expressed in 
terms of a time unit, and may include certain fixed costs; b may 
be expressed in terms of a dimension unit, such as yard; c may 



y LAWS AND MANAGEMENT 37 

be expressed in terms of a work unit, such as the ton-mile 
of haul. 

No matter what cost unit is adopted, periodic comparison of 
unit costs in totals and in sub-totals is one of the most fruitful 
means of discovering wastes and of awakening the managerial 
mind to the possibilities of reducing costs by change of men, 
change of methods, change of machines, etc. To do this, unit 
costs for each period should be divided into sub-units ; and either 
tabulated or plotted diagrammatically, or both. The diagram is 
usually more striking in its presentation of cost variations than 
is the table, but the diagram may be too bulky for convenient 
use, and otherwise objectionable. 

To make a table more effective for comparative purposes, it is 
a common expedient to express sub-unit costs as percentages of 
the total unit cost. This is often very illuminating. Not only 
does a percentage show the relative importance of a sub-unit cost 
but a change in percentages at different periods is readily noted. 

The cost of certain sub-units is often a function of the cost of 
other sub-units or of the total unit cost, or of the total income, so 
that comparisons of percentages, as above outlined, become very 
instructive. Frequently, however, the functional relation, is such 
that when one sub-unit cost goes up another sub-unit cost goes 
down. Thus, a moderate increase the cost of management usu- 
ally results in a decrease in the cost of the direct labor. So, too 
an increase in plant costs is usully accompanied by a decrease 
in direct labor costs. The manager who is fully informed as to 
scientific methods, will study the quantitative relation between 
sub-unit costs that vary inversely, one to the other. If the 
quantitative relationship can be established, it can be expressed 
in the equation that gives the "formula unit" cost. Then it 
becomes possible to apply the science of mathematics to this 
unit cost equation and solve for a minimum unit cost. Toward 
this goal all scientific cost analysis trends. 

The managerial law of unit cosh reports may be re-expressed 
thus: 

To secure economic production, all costs should be periodically 
reported in terms of sub-units, each of which is a function of the 
labor performed and materials used in its production, and these 
sub-units should be summed up as to give formula unit of total cost. 

In order to secure the greatest results from such reporting of 
unit costs, experiments should be made to establish the functional 



38 CONSTRUCTION COST KEEPING AND MANAGEMENT 

relation of the sub-unit costs to one another. If such relations 
can be expressed quantitatively, it becomes a simple matter to 
solve for a minimum total unit cost, insofar as such a minimum 
can be secured by relative changes in the costs of the sub-units 
themselves. While this method is usually exceedingly fruitful 
as a means of reducing the total unit cost, the mere recording of 
formula unit costs is itself both a stimulus to cost reduction and 
to the exercise of ingenuity to better the past records. 

"Chance" will often cause variations in unit costs, and the 
natural effort to account for any variation in the records may lead 
to most important discoveries. Without records of unit costs 
"chance" results would ordinarily escape unnoticed. 

Unit cost records can be used to show the relative efficiency 
of all men and particularly of those who direct the work of sub- 
ordinates. Competent foremen and superintendents are thus 
"discovered" much more certainly and expeditiously than is 
possible in the absence of unit cost records. Incompetence is 
likewise disclosed before serious losses occur. 

Although it is generally conceded that unit cost reports lead 
to economics, it is a rather remarkable fact that relatively little 
effort is usually expended by managers in perfecting cost keeping 
systems and in deducing formula unit costs. If it is difficult to 
measure the number of units of output of an individual or of a 
gang, the difficulty is often made the excuse for not attempting 
to surmount it. So prone are managers to avoid such difficulties 
that there is scarcely a field of human effort to-day where greater 
harvests await the reaper with brains than to be found in this 
very field of unit cost reporting. The average manager is content 
with securing cost records of a very general character, and usually 
expressed in units that are not formula units, in other words in 
units that are such as to mean next to nothing except to the man 
who made the cost records himself, and that usually mean little 
enough to him. 

The general failure to secure records of work done in terms of 
units that truly measure the work is largely accountable for the 
failure to pay men in proportion to their output, and this, in turn, 
is the secret of much of the inefficiency that managers blame 
upon their employes, when, in truth, the blame should rest upon 
the blamers. 

The Law of Systemic Research. — Although it is evident that 
the object of all management should be to increase profits, both 



> LAWS AND MANAGEMENT 39 

by increasing sales and by reducing unit costs, it has not been the 
general practice to investigate existing methods and machines 
systematically with a view to reducing unit costs. The Taylor 
scheme of timing the elements of operation of machines has 
merited all the praise that it has received. But it seems not to 
have been perceived by many of the exponents of "scientific 
management" that unit timing of processes is itself only one 
method, and not the most important method, of conducting 
systematic research for the purpose of devising more economic 
methods of production. Nor has it been generally recognized 
that unit cost keeping — which is a much older device — is also 
but a method of conducting a continuous research whose ultimate 
aim is the reduction of unit costs. 

Systematic research, then ; is a broad principle to be applied in 
all management, and, as we shall indicate, it may receive applica- 
tion in numerous ways. 

The greater part of Wellington's "Economic Theory of Railway 
Location" is devoted to investigation and analysis of the costs of 
railway operation — a systematic research. Using the data thus 
collected, Wellington proceeds to solve for a minimum unit cost of 
transportation under any given condition. His whole treatise is, in 
fact, an application of two principles of the science of management. 

Another sort of systematic research has been applied with 
remarkable results by certain manufacturers and by a few railway 
companies. We refer to laboratory experiments with materials 
and devices. Research laboratories are characteristic of many 
large electrical and chemical manufacturing establishments. 
Recently several technical articles have been published giving 
exact data as to some of the economies effected by investigators 
in these laboratories. That such laboratories have long been 
maintained at great expense is itself sufficient evidence that this 
sort of systematic research pays. 

If we turn to the various departments of the federal government 
we shall find more or less evidence of systematic reserch under- 
taken to effect economy of production, but in no department docs 
it approach in its results what has been accomplished by the 
Department of Agriculture. Within the last few years the whole 
art of farming has rapidly been elevated to the rank of a science, 
and this change has been due in large measure to the systematic 
research conducted by the Department of Agriculture. Profiting 
by this example, several railway companies have undertaken 



40 CONSTRUCTION COST KEEPING AND MANAGEMENT 

similar scientific investigation for the purpose of teaching the 
farmers in their territory how to produce larger and more profit- 
able crops. 

The manufacturers of machines have usually been content to 
effect improvements slowly, either by adopting the suggestions 
of owners of the machines or by using the invention of some 
employe or of some free lance in the inventing field. Latterly, 
however, many of the most progressive manufacturers are hiring 
engineers to make a systematic study of the work performed by 
the machines under all kinds of conditions. Two results are 
accomplished by this sort of research: First, the machine itself 
is improved; and, second, methods of using the machine are 
bettered, and owners are taught how to use the machines to 
greatest advantage. 

Like many another principle whose merit is conceded, the 
principle of systematic research does not as yet receive a fraction 
of the attention that it deserves. The majority of business 
firms are small, and the manager of a small firm is apt to say: 
"Systematic research is all very well for the big business concern 
but we, being small, have neither the money nor the time to 
devote to such things. It keeps us busy enough doing what we 
have to do now. " 

In this argument we have one of the main reasons why most 
small concerns remain small. Unless the manager of a small 
business takes the time himself or assigns someone else to study 
the problems of economic production and selling, he will always 
be extremely busy — busy trying to keep from going to the wall 
under the stress of competition. Systematic and continuous re- 
search is the secret of the rise of many a small firm into promi- 
nence. Such research usually begins with unit cost keeping 
and a careful study of the elements of cost with a view to cost re- 
duction. Then it may be followed by the Taylor method of unit 
timing of operations. Then laboratory and field research may 
follow, leading to a number of small improvements, which, in the 
aggregate however, add very substantially to the economy 
effected. Finally some radical improvement, so radical as to merit 
being called an important invention, gives the business a great 
forward impetus. The invention need not necessarily consist in 
a mechanical combination or in a chemical combination, for it 
may be a greatly improved process or product that is not even 
patentable. 



> LAWS AND MANAGEMENT 41 

Failure to succeed greatly in . management usually occurs not 
so much from lack of knowledge of the important principles of the 
science of management as from failure to apply them. Most 
of the principles of successful management are old, and many of 
them have received sufficient publicity to be well known, but 
managers are curiously prone to look upon managerial success as 
a personal attribute that is slightly dependent on principles or 
laws. In fact, however, managerial success is but an evidence of 
skill in applying the laws of management. The laws, it is true, 
may not have been learned from books. More often they have 
been derived from experience and intuition, which is but a way of 
saying that they have been arrived at by a process of induction. 
None the less, every successful manager owes his success to an 
understanding of at least a few of the important laws of the 
science of management, which laws he has diligently and skill- 
fully applied. This statement carries with it another: "Scien- 
tific management" is new only in name. Every successful 
manager, from immemorial time to the present, has applied laws 
of management that are scientific. It is true that there has 
been no codification of the laws of scientific management into a 
science until recently. It is aiso true that no scheme of manage- 
ment that involves the application of only three or four of the 
laws of management is a science of management, although such a 
scheme may be scientific management. An act may be scientific 
but an act can never be a science. 

The recent attempt to accredit a certain system of " scientific 
management" with the attributes of a complete science of 
management has aroused much just criticism; but the critics 
have themselves usually gone to an equal extreme in maintaining 
that there is no such thing as a science of management. Some, 
indeed, have claimed that such a science can never exist. Prior 
to Aristotle it might have been argued with equal seriousness 
that a science of reasoning — logic — could not be developed, 
for it could have been said: "A man is. born either with or 
without a faculty for reasoning well, and cannot be taught to 
reason." There is now a science of reasoning, and the science 
of management is itself one of the developments of inductive 
logic. 

Among the principles of the science of management, one of 
the most important may be stated thus: 

To secure greatest economy of production, regular systematic 



42 CONSTRUCTION COST KEEPING AND MANAGEMENT 

search should be employed, with a veiw of improving materials, 
machines and methods. 

Systematic research involves: (1) Unit cost keeping and cost 
analysis; (2) unit timing of operations; (3) laboratory testing and 
experimenting; (4) systematic investigation and experimenting 
in shop and field under working conditions. 

In conducting such research there is a great field for trained 
engineers, and particularly for those who have an imagination 
that leads to the invention of improved means and methods. 
Few, we believe, are wholly lacking in such imagination, and 
in all it can be developed to a greater degree by study and 
application of the principles of the science of management. 

A Principle of Management: "Credit to Whom Credit is 
Due." — So long as selfishness is characteristic of men it will be 
difficult to prevent department chiefs from claiming credit for 
improvements effected by their subordinates. Nor does the 
difficulty end there. Even the highest officials are given to 
claiming, or, if not claiming, accepting credit for things accom- 
plished by their superintendents and managers. This condition 
of affairs is so prevalent and so restrictive of economic progress 
that every possibility of its eradication by better managerial 
methods should be investigated. 

Recently C. A. Whelan, president of the United Cigar Stores 
Co., addressed a communication to all the salesmen of the 
company telling them not to hesitate to go over the heads of their 
superior officers in making suggestions for improvements. He 
said: 

"Recently an official of this company received an unsigned letter 
from one of our salesmen. The reason given for withholding the 
signature was, the writer said, that he 'was afraid if he were known it 
might cause hard feelings on the part of the sales manager.' 

"I believe few of our men have this idea, but in case you are laboring 
under this impression I would like all of our men to know that they 
have the privilege of addressing by letter or communicating in person 
on any subject, with any one of our officials or heads of departments 
without fear of consequences due to the attitude of a sales manager or 
superior. 

"I believe that our sales managers are broad enough not to take 
offense because of any difference of opinion between them and their 
men. 

"Should there be occasional instances of this kind, however, I can 



LAWS AND MANAGEMENT 43 

assure you that no harm will come to any of our salesmen because of 
the narrow view of a sales manager, or anyone else. 

"Our officials and heads of departments are at all times glad to get 
criticisms and suggestions from our men on the 'firing line.' 

"Let this be an invitation to you to give us your ideas freely and 
frankly. 

"When you think you can improve the business or have criticisms 
which are either your own or have been made by your customers, come 
to us with them." 

Unfortunately we can not agree with Mr. Whelan in his 
statement that a sales manager is not likely to take offense at 
attempts by salesmen to go over his head. The stubborn fact 
balks in the face of Mr. Whelan's optimism. Men are not so 
free from pride and selfishness as to make it probable that the 
average manager will be pleased with any act that looks to him 
like insubordination. If there is to be the harmony so essential 
where industrial "team play" is involved, some w T ay must be 
devised to give credit where credit is due, without giving offense 
where offense should not be due. 

As one looks over the periodic reports of superintendents, 
managers and presidents of organizations, it becomes noticeable 
how scant is the recognition given to those below them in rank. 
Investigation shows that this characteristic extends even below 
the written report to the word-of-mouth report. Has the gang 
boss utilized a good hint made by a workman? Then look to see 
the gang boss placidly accept all credit for it. Has the foreman 
of several gangs successfully applied a suggestion made by a 
boss? Look to see the foreman tell the manager about it without 
mention of the boss. And so on up the line, even to the president 
of a company reporting to its directors and stockholders. 

There are, of course, some happy exceptions to this rule, 
for men are not all selfish, or, if selfish generally, are not so 
always. 

As a first step toward proper recognition of each man's eco- 
nomic achievements it may be well to require periodic written 
reports from all managers, wherein are given brief statements of 
all suggestions for improvements together with the name of the 
originator of the suggestion. To make this plan most effecl ive, 
not only should there be described the accepted suggestions but 
the rejected suggestions. To do the latter would be a decider I 
innovation, but it would serve to bring to the attention of the 



44 CONSTRUCTION COST KEEPING AND MANAGEMENT 

highest officials many ideas of real merit that would otherwise 
die at birth. 

Reports of managers are seldom seen by their subordinates, 
and this accounts in part for the failure of such reports to give 
credit where credit is due. Hence it is desirable to bulletin or 
otherwise publish reports of the character above outlined. In 
the case of some companies, it might be wise to read the reports 
before the assembled staff of employes. 

Managers can soon be made to see that they need not them- 
selves be very original men in order to be very valuable managers. 
The fact is that originality and managerial ability are not often 
found in one individual. A manager to be capable need have 
little other ability than the ability either to find capable subor- 
dinates or to arouse their latent powers. Couple this capacity 
with good judgment and you have a good manager. 

A few establishments encourage employes to send in written 
suggestions, and for acceptable suggestions they give small 
prizes. The plan is good as far as it goes. It can be made to go 
much farther by incorporating such suggestions in a periodic 
report, and by subsequently paying the suggestor adequately for 
his idea. A petty prize of a fixed amount is some stimulus, but a 
real reward proportionate to the worth of a new idea would 
excite vastly greater activity of the wits of employes. 

Most large industrial companies require their salaried employes 
in certain departments to sign a contract under which the 
employe is constrained to assign to the company any invention 
that he may conceive while on the company's payroll. Could 
any scheme be devised that would more effectually, stifle an 
inventive man's inventiveness? Not a word is said in such a 
contract about any commensurate reward for an invention. 
Here again appears the same old selfishness and desire to seize 
all the credit save the mere paper crown that the patent office 
may place upon the inventor's head. 

Can we not all work more strenuously toward the goal of 
"credit to whom credit is due?" And in doing so, can we not do 
our share toward bringing about a "credit" substantially 
expressed in dollars? 



CHAPTER II 

RULES FOR SECURING MINIMUM COST 

In our own work we have found it of great advantage to for- 
mulate certain rules for reducing costs; for a study of specific 
general principles leads to many improvments in management 
that would not occur if reliance were placed upon haphazard 
attempts to reduce costs. The following are some useful rules: 

1. The sum of the items of unit cost must be a minimum. 

2. Express aU items of cost as percentages of the total, to ascertain 
the relative economic importance of each item and thus determine where 
it is best to make the first efforts at cost reduction. 

3. Express the value of all lost time in percentages of the total cost 
of each part of the work, classifying the various items. 

4. Keep down the ratio of overhead charges to direct charges by night 
shift work. 

5. Since the principal factor of the unit cost of production where 
power machines are used is the labor of attending the machines, reduce 
the cost of this attendance even at the expense of a large increase in 
plant charges. 

6. In selecting plant consider particularly the unit cost of moving and 
shifting it and the cost of lost time. 

7. Work every element of a plant to its capacity. 

8. Use every possible means to avoid accidents to plant by proper 
inspection and study of precautionary measures. 

9. Consider the animal body, whether of a man or a horse, as a 
machine burning a limited amount of fuel daily, in the form of food, 
and therefore having a limited daily capacity for work. 

10. Use low-priced men to do all work involving merely foot-pounds 
of energy. 

11. Make the sum of the items of work, measured in foot-pounds, a 
minimum. 

12. Do the most profitable part of the work first wherever possible, 
so as to avoid carrying interest charges. 

13. Make all designs for work, whether permanent or temporary 
in the office as far as possible, instead of leaving this to the ingenuity 
of foremen or carpenters, to be done in the field. 

14. Do as much as possible in a yard or shop instead of in the field. 

15. Transport and handle pieces in groups, each group being the unit 
handled. 

45 



46 CONSTRUCTION COST KEEPING AND MANAGEMENT 

16. Resolve each class of construction into the elements of work 
involved and study means of reducing the foot-pounds of each 
element. 

17. Ascertain the percentage of dead work done in conveying and 
elevating material, with a view to determining its relative importance 
and thus deciding upon what it is worth to reduce it. 

18. Cultivate a strong Esprit de Corps by strengthening the personal 
relations between the management and the personnel and by keeping 
the "labor turnover" at a minimum. 

Rule 1. — The sum of the items of unit cost must be a minimum. 
These items are: 

(a) Plant and tool charges. 
(6) Operating labor charges. 

(c) Material. 

(d) Preparatory and incidental charges. 

(e) Cash capital. 

(/) Overhead charges. 
The plant and tool charges comprise : 

1. Interest. 

2. Depreciation. 

3. Repairs. 

4. Installing and removing, including freight. 

5. Shifting during construction. 

6. Supplies, such as fuel, oil, waste, etc. 

7. Watchman. 

8. Storage during idle periods. 

9. Insurance. 

The total plant charges for an average year must be calculated 
and divided by the total number of units of product for an average 
year, or for the fiscal period on the basis of which the work in ques- 
tion is to be considered. This result will give the unit plant 
charge. 

The operating labor charges comprise the labor which is 
directly productive, such as that of a man handling a pick and 
shovel; it comprises the incidental labor, such as that of the 
water boy, etc. ; the monthly labor, such as, that of the timekeeper 
and storekeeper; and the labor of superintendence. The sum 
of the amounts paid for this labor for the fiscal period under exam- 
ination divided by the total number of units of product will be 
the total unit labor charge. 

The total cost of material for a given result, or for a given 



RULES FOR SECURING MINIMUM COST 47 

period divided by the total number of units of product, will be 
the total unit material charge. 

The sum of all the charges for getting ready to do work which 
are not plant charges and which are incidental to the particular 
job handled; and yet not necessarily proportionate to the amount 
of work to be done, divided by the total units of product or profit- 
able work upon the job for which these incidental charges are 
incurred, will be the total unit preparatory charge. 

The interest upon the cash capital involved for a given peroid 
divided by the number of units of product or profitable work of 
each kind for a period under investigation will be the total unit 
capital charge. 

The total charges which are not directly apportionable to any 
one job, ana yet are essential to running the business, divided 
by the total number of units of product or profitable work han- 
dled by the entire organization for an average fiscal period, will 
be the total unit overhead charge. 

The sum of these six unit charges should be a minimum in 
order to obtain the minimum cost. It naturally follows that it 
is not necessary for each of these items to be itself a minimum, 
since, if by an increase in the unit plant charge, the unit labor 
charge can be more than proportionately decreased, there is a 
resultant economy; and, similarly, if by increasing, even tem- 
porarily, the unit overhead charge, the efficiency of the general 
work can be sufficiently improved, the total economy will be 
increased. 

It is very important to consider items 4 and 5 of plant charges, 
for it often happens that a plant that is too large and too expen- 
sive is employed on work which is not heavy enough to justify 
such a plant. The use of a 90-ton steam shovel, costing perhaps 
$125 per day to keep in operation and turning out 400 yd. of 
material per day, costing a great deal to install and afterwards 
to remove, instead of a 30-ton steam shovel which might under 
similar conditions do 300 yd. of material at a cost of $55 per day, 
seems rather ridiculous ; yet this sort of thing very frequently is 
seen. 

Importance of Daily Unit Costs. — Complete unit costs should 
be made up daily or at most weekly intervals for each class of 
units upon which there is a contract price. Unless this is done 
it frequently happens that the contractor who thinks he has 
been making a profit on a job awakens toward its close to find 



48 CONSTRUCTION COST KEEPING AND MANAGEMENT 

that he has actually lost money on it. Now he may lose money 
on the job even if he does have complete unit costs before him 
every day, for it is very common to bid so low a price that no 
profit can possibly be made. But it is surprising what a 
difference there is in the energy of a desperate man as contractor 
with one who is well satisfied. When a contractor realizes that 
he is daily sinking deeper into the quicksands of bankruptcy, he 
will usually "camp on his job" night and day, and his wits will 
be steadily at work. Whereas if he thinks he is making a satis- 
factory profit, he is apt to take things easy, let well enough 
alone, go off on frequent pleasure excursions and the like. 

Incidentally it may be remarked that one of the reasons why 
day labor so frequently exceeds the cost by contract lies in the 
psychological fact that the engineers and superintendents in 
charge of the work have no pecuniary stake in the cost of the 
work. 

Rule 2. — Express all items of cost as percentages of the total, to 
ascertain the relative economic importance of each item and thus 
determine where it is best to make the first efforts of cost reduction. 
Following this rule will frequently disclose astonishingly high 
percentage costs of items that seemed normal. Thus, foreman- 
ship expenses are often 10 to 15% of the total cost, where they 
could be cut in two by using larger working forces, by not working 
in winter weather when there is much lost time, etc. 

Rule 3. — Express the value of all lost time in percentages of 
the total cost of each-part of the work, classifying the various items. 
Such a classification should show : 

(a) Time lost waiting for supplies or materials. 

(6) Time lost waiting for other parts of the plant. 

(c) Time lost shifting the plant. 

(d) Time lost by breakdowns (which may also be classified). 
Lost time is the bottomless pit into which more money has been 

dumped by contractors than can be estimated. It is not an 
uncommon thing to lay twice as much yardage of concrete on 
a day entirely free from delays as is laid on the average day. 
In other words, it seems practicable to do twice as much work 
daily as actually is averaged. How is this ideal to be attained, 
or at least approximated? Only by system, and system involves 
keeping costs in such a manner as to locate definitely and im- 
mediately each period of lost time for each gang, and the reason 
why. 



> RULES FOR SECURING MINIMUM COST 49 

Does the crusher shut down for an hour for repairs? Then 
the time report for the quarry must show the time of stopping 
and the time of starting, and the reason for the shut-down. It 
should be the timekeeper's duty at the end of each week and 
of each month to summarize all the time losses in the quarry, 
so that the contractor or his superintendent can see at a glance 
the size of this loss. Perhaps no better way than this can be 
invented to demonstrate what extra parts should be kept on 
hand to minimize delays. Here it may be suggested that when- 
ever a new machine is purchased, the manufacturer should be 
asked to recommend what and how many spare parts should be 
carried in stock by the purchaser. 

Where the cost of lost time due to breakdowns is kept, it 
frequently becomes evident that it is economic not merely to 
have spare parts on hand, but to have entire spare machines. 
Take a pump, for example, that is delivering water to a concrete 
mixer and for sprinkling, etc. Upon the service of that one pump 
will depend the progress of the pavement. Yet to save an 
investment of $500 to $1,000 in a spare pump, many a road 
contractor loses several fold that sum each year. Such losses 
result from failure to keep records that show the cost of lost time. 

Rule 4. — Keep down the ratio of overhead charges to direct 
charges by night shift work. A large and expensive organization 
which is occupied in running a small job is a great burden upon 
the unit efficiency of work. To remedy this the usual method 
employed by contractors is to try to carry as many contracts as 
they can. In lieu of this when it is not feasible to get many 
contracts the ones on hand should be pushed at their utmost 
speed consistent with -economy of operation. Sometimes this 
will involve working night shifts. On most steam shovel work 
night shifting is from 10 to 20% more expensive than day work 
as far as the direct labor charges are concerned, but this expe- 
dient enables the whole work to proceed faster, and aside from 
keeping down the percentage of overhead items it reduces the 
interest and depreciation charges on plant. Where the overhead 
charges are large, or when much expensive plant is being utilized, 
it is generally advisable to work double shifts excepting in 
very severe weather. However, it is generally recognized that 
where the plant investment is small and the wage item is high, it 
rarely pays to work at night, save for the purpose of completing 
a job within a time limit. 

4 



50 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Efficiency of Night Work Dependent on Illumination. — It is 

generally agreed that night work is not as economic as day work 
where the work is done out of doors; but a thorough investigation 
of the reasons for the difference seems never to have been made. 
Consequently most contractors fight shy of night work, relying 
entirely upon the supposed truth of the generalization that it 
never pays except where work must be rushed to a finish. 

Our experience leads us to believe that there need be very little 
difference between the output of the "owl shift" and the "eagle 
shift," provided two or three matters are given proper attention. 
The first of these is the matter of lighting. The second is the 
matter of warmth and food. The third is the matter of super- 
vision and cost keeping. 

Poor lighting not only retards progress because men can not 
work effectively in a twilight, but because it depresses the spirits 
of the workers. The mere fact that it is night has in itself no ill 
effect on the output of workmen : the night shift in a mine is quite 
as efficient as the day shift. 

Night work above ground is often cold work in the spring and 
autumn. It therefore pays to see that the men are well clothed 
and that bonfires or other means of warming up are provided. 
Also frequent feeding of the men and still more frequent passing 
of hot coffee among them has a surprising effect. But above all 
in importance is the lighting of the job. Here is where a penny 
saved is apt to be a dollar lost. In these days of cheap illumina- 
tion there is no excuse for not flooding the work with light. 

The Excavating Engineer states that the Illinois Kaolin Co. 
operates a Bucyrus revolving shovel day and night digging clay 
and that after a month's experience the night output has nearly 
equalled the day output. The illumination is furnished by 11 
General Electric 500-cp. flood lights. Nine of these are on 
poles 10 to 20 ft. high and can be adjusted to throw their rays 
in any desired direction. They give a strong light for about 2,000 
ft. from the lamp. Two of the lights are non-focusing, for close 
range, and are suspended from cords so that they may be readily 
shifted, and thus give perfect lighting for the shovel work. 

In this connection it is well to point out that the best type of 
electric light is the gas-filled tungsten lamp, for it consumes little 
more than half as much electricity per candlepower as the older 
vacuum tungsten lamp. Yet even the ordinary tungsten lamp 
is a cheap source of light. Thus a 500-cp. tungsten requires 



> RULES FOR SECURING MINIMUM COST 51 

about 0.6 kw.-hr. of current per hour, or 6 kw.-hr. per 10-hr. 
shift. 

The following data are taken from Engineering and Contracting 
Nov. 15, 1916: 

W. Michel, chief engineer of the Chesapeake & Ohio Northern 
Ry., stated that in filling trestles with gumbo, hauled several 
miles in trains, the night gangs on the shovel and trains averaged 
about 75% as great a yardage as the day gangs. 

H. B. Whitney, a contractor of Emmetsburg, Iowa, states 
that on drainage work (using a 1-yd. dredge), where kerosene 
lamps and torches were used, night work was about 80% as 
efficient as day work. In habor dredging, where there was less 
wind at night, the night gang usually dredged slightly more 
than the day gang. 

In hauling materials with motor trucks, many contractors 
find it profitable to work the trucks at night under certain con- 
ditions, particularly where the haul is long. Except over bad 
roads, a motor truck can safely travel almost as fast at night as 
during the day time. 

Rule 5. — Reduce the cost of attending machines even at the expense 
of a large increase in plant charges. This may be done : 

(a) By using as much power as one man can direct, without 
unduly increasing the weight of plant to be shifted. Thus, a 
6-horse team driven by one man, so commonly seen in the West, 
greatly reduced the cost of operating the common transporting 
machine, the wagon. If each horse can pull one ton, in addition 
to the weight of the wagon, we have : 

Per day Per cent 

2 horses at $2 . 00 $ 4 . 00 57 . 1 

1 man at $3.00. : 3 . 00 42 . 9 

Total, 20 ton miles at 35 cts $7 . 00 100 . 

6 horses at $2.00 $12.00 80.0 

1 man at $3. 00 3.00 20.0 

Total, 60 ton miles at 25 cts $15 . 00 100 . 

(6) By having one man attend two or more machines, as 
when one driver attends several one-horse carts in a quarry or on 
excavation. 

(c) By using gasoline instead of steam, so as to dispense with 
a fireman. 



52 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(d) By using a central power generating plant, conveying 
the steam, air or electricity to the operating units. 

(e) By using belt conveyors for short hauls. 

(/) By using moving water to transport earth, sand or gravel 
in pipes or flumes. 

(g) By concentrating the work where power can be applied 
at a few points. This is well exemplified in the use of a con- 
tractor's double track railway operated both ways by gravity 
with an incline at one end having a power driven endless chain 
for raising the single cars. In this way the cars travel both 
ways by gravity without attendants. Gravity is especially 
adapted to short hauls on contract work, where, either by building 
a light trestle or by digging a trench on an incline, the necessary 
grade can be secured cheaply. 

(h) By use of power in the driving parts of a plant ordinarily 
driven by hand — e.g., bull-wheel on a derrick — thus enabling 
the engineman to do not only the hoisting but the swinging of 
the boom. 

(i) Often by the purchase of electric power and use of motors, 
thus avoiding the cost of handling fuel, and paying firemen, to 
say nothing of the cost of shifting boilers. 

(j) By specializing the work of attendance, such as the delivery 
of material and supplies, which ought to be done as a special 
department by itself. When a drill runner has to run to the 
blacksmith shop for sharp bits or oil, the cost of attendance 
upon the plant becomes unnecessarily high. By having someone 
whose business it is to see that the high priced men spend little 
time waiting upon themselves, the economy can be much im- 
proved. 

Rule 6. — In selecting plant consider particularly the unit cost 
of moving and shifting it and the cost of lost time. Contracting is 
really manufacturing with a plant that is moved either continu- 
ously or intermittently. Too much emphasis cannot be laid 
upon the necessity of studying the costs of moving the plant by 
ordinary methods, and the devising of less expensive methods. 

The unit cost of transporting by means of a cableway is 
usually greater than by a railway, but the unit cost of installing 
and shifting the cableway Is often much less. Bear in mind that 
a plant of large capacity often is least economic, because of the 
large unit cost of installing and shifting it. The unit cost of 
plant erecting and shifting may be reduced in many ways: 



RULES FOR SECURING MINIMUM COST 53 

(a) By mounting it on a traveler, as when several rock drills 
are mounted on a traveler on wheels. This is often done in tun- 
nel work, and could be frequently adopted to advantage on open 
cut work. 

(6) By the use of light derricks or gin poles for erecting heavier 
derricks. 
, (c) By using guy-derricks instead of stiff-leg derricks. 

(d) By using "locomotive cranes." 

(e) By a light one-rail track fastened to the side of a steam 
shovel, and provided with a trolley for carrying the sections of 
steam shovel track from rear to front. 

It is rare that any contractor is able to state what the "pre- 
paratory costs" have been on any given job, and this holds true 
even where the contractor has a cost keeping system. No 
argument is needed to prove that unless the "preparatory costs" 
are known there is grave danger of underestimating the total 
unit costs. 

Having so kept the daily records as to show the actual cost 
of moving and installing a crushing plant, for example, to this 
should be added the estimated cost of shifting it (where shifting 
will be necessary) and the cost of dismantling and shipping it 
home. Then this total should be divided by the total number 
of cubic yards of stone to be crushed on the given job, to get 
"the unit preparatory and shifting cost" of crushed stone. 

This unit cost should be added each day to the "unit overhead 
cost" and the "unit direct cost" for that day. The resulting 
total will then be really significant as to what the pavement is 
actually costing. 

Rule 7. — Work every element of a plant to its capacity. A 
contractor's plant is usually composed of a number of elements, 
or units — e.g., steam roller, traction engine, rock crusher, rock 
drills, boilers, etc. The plant should be so designed and handled 
as to work each of these elements to its full capacity. This may 
be accomplished thus: 

(a) By coordinating the elements so that each element work- 
ing to capacity keeps every other element that depends upon it 
working up to its capacity. 

(6) By providing extra machines to avoid delays due to break- 
downs or to necessary stoppages. Thus, for every eight rock 
drills in service, provide one extra drill. Also, provide an extra 
wagon or two when loading by hand on short hauls. 



54 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(c) By providing extra parts of machines and means for rapidly 
replacing worn or broken parts. It is not the cost of repairs that 
is usually an expensive item per unit of product, but the lost time 
of the entire plant and the working force. . 

(d) By giving each machine as uniform a "load" as possible, 
no "peak loads." If a machine is designed to provide for inter- 
mittent periods of heavy work, there is a great waste of interest 
and depreciation on the investment in the excess power capacity 
during the periods of normal exertion. Moreover, the machine 
subject to "peak loads" is heavier than one not thus subject to 
periods of extreme work, and is consequently more costly to 
transport, install and shift, which is not important in manufac- 
turing but is very important in contracting. 

(e) By giving the operating tool of the machine a rotary 
motion, if possible, instead of a reciprocating motion. This is a 
corollary of (d), for a rotary tool is generally constantly at work. 
Thus, a rotary auger should be used in all fireclays and soft shales 
instead of the ordinary reciprocating or percussion drill, for the 
constant application of the power of the rotary cutting tool puts 
no pulsating or "peak loads" on the machine. 

(/) By providing stock piles large enough to tide over irregu- 
larities in delivery of materials. This is of exceeding impor- 
tance on contract work, but is usually given scant consideration. 

(gr) By having one or more men at the manufacturing plant, 
stone quarry, or sand pit, from which the important materials 
are being purchased. In no other way is it possible to get uni- 
form delivery of materials by rail from points distant from the site 
of the contract work. Often it pays to have a man whose sole 
duty it is to get empty cars from the railways and to go to freight 
yards and see that loaded cars are not held at the yard. 

(h) By having, if necessary, an extra man or two on hand, 
and idle a good part of the time, who can jump in and clear "away 
any material or obstacle that is blocking the full operation of the 
plant. A particular instance of this occurred some time ago on 
some steam shovel rock work in which considerable drilling had 
to be done in front of the shovel. As soon as the shovel stopped 
working it was necessary to get drills going immediately in order 
that the shovels should be idle as short a time as possible; and it 
was found highly economical to have a drill crew handy so that 
they could at once be turned over to the work in front of the 
shovel. Their time was economized, of course, to some extent 



RULES FOR SECURING MINIMUM COST 55 

by having them ordinarily work as near the shovel as possible 
and calling them by whistle signal as soon as a shovel was blocked. 

(i) By not having in service plant which is ordinarily capable 
of much more work than it is likely to be called upon to do. The 
most efficient way to work a dynamo or a boiler or a steam shovel 
is to work it to its regular capacity, and when it is working at 
less than this it is not as economical of fuel, of capital charges, 
or of the wages of the men who handle it as when its work is prop- 
erly balanced. 

Rule 8. — Use every possible means to avoid accidents to plant 
by proper inspection and study of precautionary measures. It is 
possible to make out an insurance policy against suits brought by 
men who are accidentally injured upon the work, but it is not 
possible to obtain an insurance policy protecting the contractor 
from the economic disadvantages resulting from accidental 
interruptions to the smooth progress of the work. The fall of a 
derrick may injure a man and the contractor be relieved from 
legal responsibility by the insurance company, but nothing 
relieves him of the loss in the efficiency of his work incidental to 
getting a derrick repaired and set up again, to say nothing of the 
discouraging effect of an accident upon all the workmen. 

One of the commonest causes of delay to such operations as 
those involved in steam shovel work is the derailment of cars. 
This can best be guarded against by keeping the tracks in good 
line and surface, and by seeing that the cars are regularly in- 
spected so that defects in the coupling or running equipment are 
speedily detected and repaired. 

Where steam drills are runnning, breaks in the pressure supply 
pipe are to be looked for, and in freezing weather general bursting 
of pipes must be carefully guarded against as one of the most 
expensive things on the job. The pipes should be protected by 
lagging, burying in trenches, manure troughs, etc., and in addi- 
tion to this many of them must be regularly drained at night. 
Carelessness in this particular is so common on the part of the 
average men on the work that the best method known to us is to 
organize a regular pipe gang whose business it is to see that pipes 
are kept open, and who are responsible for delays of this kind. 

The break down of a flue in a steam boiler can come overnight 
through careless firing on the part of the watchman. The dis- 
charge of the watchman is small compensation for the damage 
that occurs as a result of it. 



56 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Rule 9. — Consider the animal body, whether of a man or a 
horse, as a machine burning a limited amount of fuel daily, in 
the form of food, and therefore having a limited daily capacity 
for work. Thus, a horse walking at a speed of 220 ft. per 
minute, or 2^ miles per hour, can exert a steady pull of 10% 
of its own weight for 10 hr. For a horse weighing 1,200 lb. 
this means 15,840,000 ft. -lb. of work daily, in addition to the 
work of raising its own body every time it takes a step. 
A man weighing 150 lb. can exert a steady pull of 5% of 
his own weight, or 7% lb- at 220 ft. per minute, which 
amounts to 990,000 ft.-lb. per day, in addition to the work 
of raising his own body every step, which amounts to another 
1,000,000 ft-lb. 

When this rule (nine) is observed, the contractor will: 

(a) Feed the workmen, as well as the horses, with abundance 
of nourishing food. On the Panama Canal the Jamaica negroes 
were at first regarded as being almost worthless as workers. 
Later it was found that the trouble lay largely in the poor food 
to which they were accustomed, and proper feeding greatly 
increased their output. 

(b) Either house the workmen near the work, or transport 
them to the work, thus saving every foot-pound of energy for 
useful work. 

(c) Teach workmen to use the heavy leg muscles instead 
of the arm and back muscles in lifting, shoveling, etc. 

(d) Do not let the workman carry loads, if avoidable, for 
half his available energy is then consumed in the lifting of his 
own body (^ ft. each step) when walking. On timber work, 
men are often seen carrying heavy timber with "lug hooks" or on 
their shoulders, where they should be pushing the timber on a 
"dolley" (a roller with a small platform on it) over run-planks. 
Hod carrying up a ladder should give place to lifting the loaded 
hod by a handpower elevator, if the size of the work does not 
justify a power elevator. 

(e) Remember that at $2.50 a day for labor, and 1,000,000 
ft.-lb. of useful work performed, the cost is $2.50 per million 
foot-pounds. That is $2.00 a day for a horse plus $1.50 for the 
services of a driver and 16,000,000 ft.-lb. performed, the cost is 
22 cts. per million foot-pounds or }/{ \ the cost of man work. 
Hence horse power should be substituted for man power wherever 
possible. 



RULES FOR SECURING MINIMUM COST 57 

(/) Select heavy men where heavy work is required, as in 
feeding a stone crusher whose output depends largely upon the 
strength of the men feeding it, for muscular strength is usually 
a function of weight. 

(g) Use only heavy draft horses or heavy mules. A 1,600- 
1b. horse will do 33% more work than a 1,200-lb horse, hence 
a team of 1,600-lb. horses will do 66% more work, yet with no 
increased expense for driving. 

Rule 10. — Use low-priced men to do all work involving merely 
foot-pounds of energy. For example : 

(a) Don't let carpenters at 70 cts. an hour carry lumber that 
a 30-ct. man can carry as well. 

(b) Have laborers clear away earth, loose rock, etc., over each 
proposed drill hole, instead of permitting drillers to do so. 

(c) Plan the layout of work in such a way that the high- 
priced men have not only to move the shortest possible distance in 
order to handle their tools and materials, but arrange the direc- 
tion of this motion so that as far as possible it may be down grade. 
Thus, have the bricklayers' helpers so place bricks for the brick- 
layers that, when the bricklayer grabs the brick, instead of 
raising it to its position upon the wall, he moves it either hori- 
zontally or down grade. The amount of fatigue incidental to the 
moving of one brick weighing 4% lb. is almost inappreciable, 
but, when a man is laying as many as 3,000 bricks a day, the 
difference between raising it 2 ft. and bringing it down 1 ft. is 
over 25,000 ft. -lb., which makes a big difference in the total 
fatigue of the bricklayer. 

Rule 11. — Make the sum of the items of work, measured in 
foot-pounds, a minimum. This rule is axiomatic, but, in spite of 
its self-evidence, it is rarely applied to all parts of a job. Work 
equals resistance in pounds multiplied by distance moved in feet 
(W = R x D). Obviously, then, one of the first applications of 
this rule is: 

(a) Reduce the distance from a machine to the center of 
gravity of the materials in the adjacent stock piles to a minimum. 
Thus, the broken stone stock piles should be placed nearest the 
concrete mixer, the sand next, and the cement farthest. The 
reverse is usually done, although there arc six times as many 
pounds of stone as of cement in a yard of concrete. Engineers 
have often made this sort of blunder when designing cableways 
for transporting materials from scows, so that the broken stone 



58 CONSTRUCTION COST KEEPING AND MANAGEMENT 

was to be moved about twice as far as the sand, and the cement 
was moved the shortest distance of all. 

(b) By motion study and second-hand timing eliminate un- 
necessary motion and shorten the distance of necessary motions 
— e.g., low wagon boxes loaded by hand (2 ft. of height saved 
may add 10% to man's output). 

(c) Reduce the resistance: 

1. By using rollers and wheels for transporting — e.g., "dolley" 
for transporting lumber instead of carrying it; (2) by using 
runways, roads and tracks; (3) by balancing the dead load of 
buckets and skips, so that journal friction is substituted for a dead 
lift against gravity. 

Rule 12. — Do the most profitable part of the work first wherever 
possible, so as to 'avoid carrying interest charges. For illustration 
we will take an example based on an actual experience, names 
and figures being assumed: 

Contractor Jones had a capital of $30,000 and obtained a 
contract for $250,000 worth of earth and rock work. His esti- 
mate of cost was as follows: 

Earth, 140,000 yd. at 50 cts. (including 5 cts. profit). . .$ 70,000.00 
Rock, 120,000 yd. at 1 . 50 (including 15 cts. profit) .... 180,000 . 00 

Total contract $250,000.00 

Estimated profit — 

140,000 yd. at 5 cts $ 7,000.00 

120,000 yd. rock at 15 cts 18,000 . 00 



Total $ 25,000.00 

or 10% on the whole amount. 

The contract was for "unclassified" work; there was no dis- 
crimination made between rock and earth, but because he had 
been very friendly with the engineers who made the oringinal sur- 
vey Jones felt that he was safe in trusting to the figures. The 
contract simply provided that for doing 260,000 yd. for excava- 
tion Jones was to receive the total sum of $250,000 payable in 
monthly installments as the work progressed, 10% to be retained 
until the completion of the work. The plan of campaign, which 
is the subject of this discussion, was as follows: 

The earth was to be done first, and would yield the follow- 
ing results: 



RULES FOR SECURING MINIMUM COST 59 

140,000 yd. earth at 96.154 cts. contract price $134,615.39 

10% retained until completion 13,461 . 54 

Balance to be paid as work progressed $121,153.85 

Actual cost (estimated) 140,000 at 45 .cts 63,000 . 00 

Balance available for running expenses $58,153.85 

Then the rock was to be done, amounting to 

120,000 yd. rock at 96.154 cts $115,384.62 

10% until completion 11,538.46 

Balance to be paid as work progressed $103,846. 16 

Actual cost, estimated, 120,000 at $1 . 35 162,000 . 00 

Deficit on the rock. . $58,153.84 

Balance available on the earth work 58,153.85 

Total of amounts retained (Total Profit) $25,000.00 



The work thus would "carry itself" except for the first month, 
supplies could be paid for on 30 days, a plant costing $40,000 
could be paid on 90 days, and the money borrowed to pay three- 
quarters of this amount. On completion of the work the plant 
could be sold for a fourth of what it cost, and thus it was figured 
that a cash capital of $30,000 would be ample. What happened 
was this: When the time came to start on the earth-work there 
was no drainage, and no one thought of using a centrifugal 
pump in the shovel pit. It was then decided to get into the rock 
work first, borrowing some more money if necessary and do at 
least one-third of the rock work before starting the earth, then 
to do them both together. It works out as follows : 

50,000 yd. rock at 96.154 cts $48,076.93 

10% retained 4,807 . 69 

Balance available $43,269.24 

Actual cost (estimated) 50,000 at $1.35 $67,500.00 

Deficit on which interest must be paid $24,230 . 76 

When he had about 19% of his contract finished he was saddled 
with a fixed charge of 6% on $24,230.76, or $1453.85 per year. 
With extensions the working time was 5 years, or 4 years on 
which he was paying the above interest, and moreover, once 



60 CONSTRUCTION COST KEEPING AND MANAGEMENT 

having started the rock work, it would have been expensive to 
drop it, so it was continued, the deficit and interest charges 
growing. The engineer in charge happened to be strictly honest 
and honestly strict, and would not budge an inch from the 
specifications. The surface of some of the rock work had to 
be "sand-papered," no latitude was allowed in regard to making 
waste heaps. If blasting did not go beyond the clearance plane 
the corners had to be knocked off, while if the blasting did go 
beyond the clearance plane the extra amount was not paid for. 
Before Jones took hold of the contract he had interested some 
strong financial people with him, more money was raised, and 
the work went on, at a loss and a big one, pushed to save the 
financial reputation of all the parties and because it was cheaper 
to go on at a loss than to default on a bond. 

Rule 13. — Make all designs for work, whether permanent or 
temporary, in the office as far as possible, instead of leaving this 
to the ingenuity of foreman or carpenters, to be done in the field. 
Carpenters and foremen almost invariably use factors of safety 
that are unnecessarily large for posts, and often are altogether 
too small for beams. Moreover, their fastenings and joints are 
usually disproportionately weak. Hence they produce tempo- 
rary structures that are much too heavy in most of the parts, and 
often dangerously weak in others. The "old hand at the busi- 
ness," as such men always claim to be, is often pretty much of an 
old fool when it comes to designing structures to resist stresses. 
On the other hand, the young engineer is apt to use too large a 
factor of safety throughout for temporary structures, particularly 
those of wood. The large factors of safety for timber recom- 
mended in bridge books are intended in part to cover subsequent 
weakening by incipient rot. Bins, forms, platforms, etc., that 
are to be moved frequently, should be bolted together, instead of 
spiked. Timbers can often be so fastened together, and left in 
full lengths without framing, as to be marketable after being used 
as falsework. 

Where many moves are to be made, steel is frequently cheaper 
than timber in the long run, for it is less injured and shows a 
higher salvage value, e.g., steel sheet piling, steel centering, etc. 

Scaffolding may be largely reduced in cost by supporting 
such scaffolding as is necessary from the partly finished structure. 
This is well illustrated in the American method of erecting 
apartment houses and office buildings. 



RULES FOR SECURING MINIMUM COST 61 

Falsework may often be done away with entirely by the use 
of a traveler, e.g., the method of erecting steel viaducts with a 
traveler. 

Rule 14. — Do as much work as possible in a yard or shop instead 
of in the field. Where economic means of transportation exist, 
and particularly where the work is of any considerable magnitude, 
but spread over a large area, it is usually desirable to do as much 
of the manufacturing of a structure in a shop or yard as possible. 
In this manner the plant loses no time from being shifted, and, 
since the expense of shifting is eliminated, a heavier plant with a 
larger daily output can be operated. 

In building small reinforced-concrete culverts, we have found 
it most economic to make the floor, side walls and cover in a 
yard instead of on the site where the culvert is to be erected. 

Timber structures can usually be framed at a very low cost 
in a small yard equipped with power saws, augers, and plant for 
handling timbers. Hence where there is much falsework to 
erect, either install such a plant, or have the framing done at a 
mill. 

A cheap roof of boards covered with tar paper can be placed 
over a small yard and thus enable the work of framing, riveting, 
stone cutting, concrete slab making, etc., to go on without 
interruptions from the weather. Considering the slight cost 
of such roofs, it is surprising how seldom contractors build 
them. 

Rule 15. — Transport and handle pieces in groups, each group 
being the unit handled. This is, perhaps, one of the most impor- 
tant rules for economic construction, and is susceptible of wide 
application. The following are some examples: 

(a) Brick handled in packets as described in Gilbreth's 
" Brick Laying System." This method of handling bricks is to 
load 16 or 17 bricks upon a little wooden frame made of four 
pieces of wood nailed together and of such shape that they can 
be carried by the workmen as a convenient load. These 17 bricks 
will weigh about 76 lb. and make a packet which is of convenient 
weight for one man to handle economically where the carry is 
comparatively short. Mr. Gilbreth's method is to load the 
bricks upon the packets in the car on which they are delivered 
to the work, or even in the loading yard, and to handle them in 
units in this manner until they are deposited about 21 in. from 
the wall alongside of the brick layer in such a position that he 



62 CONSTRUCTION COST KEEPING AND MANAGEMENT 

reaches for every brick with his left hand in the same manner and 
in the same relative position, thus avoiding the necessity of 
mental work on the part of the brick layer in choosing one brick 
after another, enabling a comparatively large number of packets 
to be handled upon a wheelbarrow, and eliminating the element 
involved in the picking and choosing done by the man who is 
loading a hod. Incidentally, when handling a hod, a hod-carrier 
must do considerably more foot-pounds of work than are neces- 
sary, and this accounts for something in the long run of a day's 
work. 

(b) Quarried stone handled in skips, from the time it leaves 
the quarry until it reaches the rock crusher or the mason. 

(c) Dump wagon box loaded with sand in a pit, lifted by a 
derrick and placed upon the wagon gear, lifted by a derrick at 
the concrete mixer and dumped into sand bin. 

(d) Forms for concrete built in movable units — e.g., sewer 
and tunnel lining centers. 

(e) Girders for bridges and roofs, transported and handled 
as one piece. 

(/) Bents for trestles, framed and joined while lying flat on 
the ground, and then placed in position as one unit. 

(g) A further illustration is in the riveting together of as 
many bridge members as can be carried upon a car or combina- 
tion of cars for transportation and which can be erected as a 
unit. Appreciation of this fact has led to the general use of plate 
girders wherever possible, since the erecting costs are low and by 
far the greater part of the riveting work can be done in the shop 
under the most favorable conditions for economic work. 

Rule 16. — Resolve each class of construction into the elements of 
work involved and study means of reducing the foot-pounds of each 
element. 

Thus shoveling involves: (1) Penetrating the mass, (2) elevat- 
ing the material, and (3) moving it horizontally (overcoming the 
inertia of the shovel and the mass). By shoveling off an iron 
plate, the work of item (1) is greatly reduced, especially where 
the material is broken stone. By loading into skips, or very low 
wagons or cars, item (2) is reduced, or it may be largely eliminated 
caving the earth from a breast directly into a bucket or skip. 

Rule 17. — Ascertain the percentage of dead work done in con- 
veying and elevating material, with a view to determining its relative 
importance and thus deciding upon what it is worth to reduce it. In 



RULES FOR SECURING MINIMUM COST 63 

all conveying, the work of moving the conveyor itself is "dead 
work." Thus, a wagon weighing 1 ton is used to transport 3 
tons of load; therefore 25% of the work of transportation is 
"dead work." A shoveler uses a shovel weighing 5 or 6 lb. to 
shovel 15 or 20 lb. of earth, and thus performs 25% of "dead 
work" so far as elevating and transporting the earth is concerned. 
It might well pay, therefore, to substitute a higher-priced shovel 
made of alloyed steel, so as to secure a much lighter shovel that 
would reduce the "dead work." 

Rule 18. — Cultivate a strong esprit de corps by strengthening the 
personal relations between the management and the personnel and 
by keeping the "labor turnover" at a minimum. 

It is self-evident that a machine which is set up and operating 
can turn out a piece of work quicker and for less cost than one 
that has to be uncrated assembled, set up and adjusted. Thus 
it is that a working organization is more efficient than one that is 
newly "thrown together" and has not commenced to function 
properly. 

Therefore, it is apparent that in order to carry out work with 
greatest efficiency, it is essential to maintain a working organiza- 
tion. This holds true not only as regards executives and superin- 
tendents but also in the case of foremen and in fact the laborers 
themselves. 

One Contractor's Method for Holding Good Men. — Morton 
C. Tuttle, of the Aberthaw Construction Co., describes in Engi- 
neering News, April 8, 1915 a method for giving more regular 
employment to the men and thereby mitigating the hardships 
caused by the irregularity of employment which has been the 
principal evil to both employer and employee in the building 
trade. 

After 15 years of successful progress from small beginnings, 
the Aberthaw Construction Co. found that, as is the case with 
every other company in the building business, certain men 
followed its work and looked to it for regular employment. Even 
on its scattered work, men preferred to travel in order to stay 
with the superintendents they knew rather than to stand their 
chances of irregular employment near home. 

The principal difficulty which the men experienced came from 
the fact that wages vary considerably in different localities. 
There is usually a going rate of wage for a given occupation and 
these zones of varying wage are surprisingly close together, owing 



64 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to the fact that in the building trade most of the work in a given 
place is handled by the local contractors, who recognize a wage 
established in that section. We found that our men who had 
traveled naturally went to the jobs where the local wage was the 
highest, and we found that before a job was completed they 
tended to drift toward another job that was just starting or had 
several months to run. 

In an effort to correct this condition, we issued "Record of 
Service Books " to a limited number of the best of our men. We 
guaranteed a book holder an agreed wage per hour wherever he 
worked for this company, and we agreed to give any book holder 
employment as soon as the company had a position available 
which he was capable of filling and we kept all bookmen informed 
of new work, and whenever new work came up we communi- 
cated with any of them who did not happen then to be employed 
by us. 

When it was proposed to do this there was a feeling among our 
superintendents that bookmen were likely to neglect their work 
on the feeling that they had assured positions with the company. 
It was pointed out that the system of signing in and out on a job 
would prevent this, and each superintendent had the right to 
refuse to sign out any unsatisfactory man. As a matter of fact, 
the assurance of regular employment tends to make a man more 
faithful and easier to handle than is the floater. 

The method of signing in and out with these books is as follows : 
When a man presents his book on a new job, the superintendent 
fills in the left-hand page, stating that he began work at a given 
date on a named job. At the end of the job, if the man's work 
had been satisfactory, the superintendent signs the statement 
that he quit work on a given date, and sends his book to the main 
office, where a sticker is attached to the right-hand page, and this 
is signed by an officer of the company, showing that the man has 
served properly on this job and that this book is good. The same 
process is repeated on future jobs. The book not only serves to 
give this man regular employment with our company, but is a 
first-class recommendation to any other company, who happens 
to value our opinion in regard to workmen in our line. In order 
that the book shall not be transferable, it contains at the front 
a very brief description of the holder, giving nationality, age, 
height, weight, color of eyes, color of hair, and his signature. A 
carbon copy of this page is torn out and held at the main office. 



RULES FOR SECURING MINIMUM COST 65 

In 1910 an investigation was made as to the average earnings 
of carpenters and form builders in our employ. About the only 
information that could be obtained was from the men themselves, 
and this being a matter of memory was naturally incomplete and 
unreliable. The opinion was formed, however, that the average 
earning of the best men, who were paid 40 to 50c. per hour, was 
between $15 and $18 per week, seldom reaching the higher figure 
in the course of a year, owing to lack of work, interruptions on 
account of storms, and other delays incident to outdoor employ- 
ment on an hour basis. 

In February, March and April of 1911 we issued books to 21 
men, and in the remainder of that year we issued three other 
books. In 1912 we issued 23 books, in 1913, six books, in 1914 
five more — a total of 68. 

The following table gives the number of weeks that each one 
of these men worked for this company with the maximum and 
minimum earnings per week: 

Table Showing Work of Bookmen for Year 1914 

Total number of men holding books 68 

Canceled for inefficiency or for not being reliable 2 

Number of book holders moved to foreign countries or engaged 

in other occupations 9 

— 11 

Active book holders 57 

Number of book holders away 1 to 6 months of their own accord 

and not available for work 14 

Number of book holders losing work due to inefficiency or for not 

being reliable 4 

— 18 

Number of men available for full year's work 39 

Average time of employment of each of these 39 bookmen 50 weeks 

Smallest employed period 40 weeks 

Average yearly earnings $1388 . 00 

Average weekly earnings 27 . 76 

Highest yearly earnings 1736 ■ 99 

Lowest yearly earnings 886 . 92 

These figures show that these men have earned wages that 
compare favorably with wages of men in less seasonable occupa- 
tions and indicate the possibility of making profitable an occupa- 
tion as irregular as that of the building trade. 

5 



66 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The figures on the earnings of the various men show advantage 
to the employees. From the point of view of the employer, we 
can state that the result has been satisfactory to us, that we 
have probably obtained better return, for our money from these 
men than from any others that we have employed. One has 
only to consider the extraordinary expense of teaching an inex- 
perienced man a new trade to realize the fearful waste that there 
is in the building trade in picking up unorganized gangs and 
hiring, firing, and teaching, until a reasonable degree of efficiency 
has been obtained. The cost of an average reinforced-concrete 
building is made up of about 35% labor and 65% material. 
More serious than the inefficiency in the labor, itself, is the de- 
struction and the waste of material. The employer's power of 
control is necessarily limited where a man expects for the rest of 
his life to drift from one job to another. 

The gradation of punishments in the building trade is very 
crude, there usually being two electives — to call a man down 
severely, to which the man usually does not object, or to fire him, 
which in many cases makes very little more impression on him 
because he expects to be out of work a large part of the time and 
looks on such a discharge as simply meeting one of the evil days 
that he expects to meet frequently. With regularity of employ- 
ment, proper and humane discipline can be brought into the 
building trade. The Record of Service Books used by this com- 
pany offer an opportunity for this. For some misdemeanor or 
other a bookman who has completed his work may be given 
his book not signed by the superintendent, and yet the latter 
may not consider the matter serious enough to cancel the book 
altogether. This omission puts the man on the same basis as a 
man without a book except that if he can get located again and 
properly signed out he becomes a book holder again in good 
standing. The lay-off of graded length, the threat of discharge 
or lay-off, and the criticism of work in which a man takes pride, 
all become more effective when the employee is with an organiza- 
tion offering him steady employment. 



CHAPTER III 

PIECE-RATE, BONUS AND OTHER SYSTEMS OF 

PAYMENT 

The fundamental law of management involves that payment 
for work done shall be proportionate to performance — that is, an 
increased number of units of work done by a man shall result in 
his receiving increased pay. The ordinary wage system is based 
upon this law, but only in a very crude manner, since it throws 
men into large groups or classes, individuals of which receive 
the same pay, or practically so. 

We shall now consider some of the various methods that 
aim to recompense a workman in proportion to his performance. 

Profit Sharing. — According to the method of profit sharing, 
each individual receives not only his wage but a pro rata of any 
profits that arise from the business. Either quarterly, semi- 
annually, or annually, the profits of the business are estimated, 
and a certain percentage of these profits is distributed to the 
workmen and their managers. Often this distribution of profits 
is confined to the managers only. 

While this is an improvement over the wage system, it violates 
the sixth law of management — namely, the law of prompt 
reward. The imagination of the ordinary workman is not enough 
to maintain his interest in his work at the high pitch necessary 
to enable him to do his very best. Moreover, any community 
interest in a commercial enterprise lacks sufficient stimulus. It 
requires a more direct, personal interest in the outcome to arouse 
a man to action. 

Profit sharing, whether by the payment of profits direct, or 
in the form of dividends on stock held by the workman, is, at 
best, only a moderate step in advance of the ordinary wage 
system so far as the average workman is concerned. 

Piece-rate System. — According to the piece-rate system, 
each workman is paid a certain stipulated amount per unit of 
work done by him. If all managers were fair in their dealings 
with workmen, and if all workmen were reasonable, the piece- 
rate system would be almost ideal as a method of paying men 

67 



68 CONSTRUCTION COST KEEPING AND MANAGEMENT 

wherever the work is of a character that admits of measuring 
individual performance. Due to hoggishness on the part of 
managers and unreasonableness on the part of workmen, the 
piece-rate system usually fails to accomplish the desired end. 

Having established a piece rate of, say, 20 cts. per cubic 
yard for shoveling earth into wagons, on the assumption that 
15 cu. yd. per day per man is a fair output, it requires more 
than ordinary foresight and liberality not to cut the rate when 
laborers begin to load 25 cu. yd. a day. The typical contractor 
will then begin to reason about as follows: "These men have 
been soldiering on me in the past. I always thought so; now I 
know it. Well, now that I do know it, and they know I know it, 
they will have to work at this rate hereafter or get out. What's 
more, I am not going to be gouged out of an extra two dollars 
a day, either. If they make 95 cts. extra a day, it's more than 
they ever got before, and it's all they are entitled to, so we will 
just drop that 20-ct. rate down to 15 cts. That will satisfy 
them." But the trouble is that it doesn't. The men immedi- 
ately become angry, and rightly so. If they do not quit entirely, 
they lose all further ambition and desire to increase their output, 
knowing full well that the piece-rate will be so cut as to enable 
them to earn only a slight advance over their original day's 
wages. 

This experience has been so general that nearly all labor 
unions have put a ban on the piece-rate system. Bear in mind, 
however, that the piece-rate system is not inherently at fault, 
and that it is used with great success in. many places where the 
management has been liberal and far-sighted. 

On piece-rate work that involves the use of machinery, it is 
manifest that any improvement in the machinery which enables 
the men to turn out more units daily, should be accompanied by 
some reduction in the piece rate. Workmen, however, are 
usually unreasonable and oppose any reduction in the rate. This 
unreasonableness disgusts the manager as much as a manager's 
hoggishness disgusts the workmen. If the manager goes to the 
expense of buying and operating improved machinery, he is 
entitled to his share of the increased profit, but the workman is 
not quick to see things in that light. 

Obviously, any piece-rate system is productive of more or 
less friction between managers and men, yet no system is free 
from some friction. Probably the chief function of the labor 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 69 

unions of the future will be to protect workmen in agreements 
with managers, and to be parties in arriving at what those 
agreements shall be. 

The Bonus System. — This system involves paying each 
workman a daily wage plus a piece rate on each unit in excess 
of a stipulated minimum. This piece rate on excess product is 
called a bonus. For example, a laborer receives $2.50 a day for 
shoveling earth, and on each cubic yard in excess of 15 cu. yd. 
shoveled per day he receives a bonus of 10 cts. If he shovels 
25 cu. yd., he receives $2.50 + (0.10 X 10) = $3.50. 

The bonus system is really a piece-rate system with a guar- 
antee of a certain minimum wage. Slight though this difference 
from the piece-rate system is, it is generally viewed with more 
favor by workmen. 

The Differential Piece-rate System. — The principle of this 
system is to pay a certain piece rate up to a certain output per 
man, and a higher rate (but still a piece rate) above that output. 
Applied to drilling, for example, the drill runner would be paid, 
say, 9 cts. a foot up to a performance of 50 ft. per day, and 
12 cts. a foot for every foot above 50. The helper might still 
be paid $3 a day straight, but it is wise always to give him also a 
contingent interest in the result of his work. 

This system, which was devised by Frederick W. Taylor, is 
described in the following paragraphs. 

General Plans on Which the Taylor Differential Piece-rate 
System Is Based. — There are two fundamental assumptions 
on which the layout of any extensive system of labor must be 
predicated: 

I. A man can do his theoretical best if continually instructed 
and coached, but not otherwise. 

II. A man will do his theoretical best if adequately 
remunerated, and not otherwise. 

It is assumed in the expression of "theoretical best" that 
the right kind of theory is meant. A theoretical best that is 
founded on a lost theory is not here considered. The application 
of these assumptions depends upon the following fundamental 
principles of practice as outlined by Mr. Taylor: 

1. A large daily task that must not be impossible. 

2. Standard conditions, so that work can be accomplished 
with certainty. 

3. High pay for success, 



70 CONSTRUCTION COST KEEPING AND MANAGEMENT 

4. Loss in case of failure. 

5. The task set must be so difficult ultimately that none but 
a first-class man can do it. 

The first of these principles is based upon the fact of observa- 
tion that if you give a man a specific thing to do in a definite 
amount of time he will do it more efficiently and more accurately 
than if you give him the same thing to do and he is supposed to 
take "any old time" to do it. This fact is so old and is so thor- 
oughly grafted upon the minds of all men who do work that it 
seems unnecessary to argue in its favor; that it has not been 
more generally applied is due to the lack of appreciation of how 
easy it is to apply it. Hence, the rare and useful corrollary to 
this proposition — namely, that the duration of a special task, for 
the maximum efficiency, will be so short that a man can keep 
his mind continually concentrated upon the speed with which he 
is progressing, without becoming mentally exhausted. In prac- 
tice it is sometimes possible to apply this principle without actu- 
ally knowing what a reasonable task is by taking two men of 
about equal capacity and setting them to do the same kind of 
work in competition; then the task that each man has is to beat 
the other fellow, which, if he is gifted with ordinary red blood, 
he proceeds to do. In the course of a comparatively short time 
he finds out whether he can beat him, or not, and as soon as it 
is definitely settled which man can beat the other they both stop 
trying. It is possible, before they get through competing, to 
determine how fast they have been working, which is the really 
valuable point about competition. 

Another method for ascertaining a man's possible output, 
and one which is mostly used in shop work, is to divide up the 
time of any process into its component parts. The process of 
rock drilling, for example, can be divided into the following 
component parts, starting with the drill all set up and ready for 
work: 

1. Turning on the steam. 

2. Drilling to the limit of the first bit. 

3. Turning off the steam and picking up wrench. 

4. Loosening the bit in the chuck, involving the unscrewing 
of two nuts and the turning of the chuck. 

5. The raising of the chuck by hand to release the bit, assisted 
by the helper, who during the rest of the process is winding up on 
the feed screw. 



- PIECE RATE, BONUS ANDOTHERSYSTEMS OF PAYMENT 71 

6. Drawing out the steel from the hole. 

7. Laying the steel down and picking up the pump. 

8. Pumping out the hole. 

9. Laying down the pump. 

10. Picking up the next bit. 

11. Dropping down into the hole. 

12. Raising piston and slipping over the head of bit. 

13. Picking up wrench. 

14. Tightening nuts, involving % revolution of the piston 
about its axis. 

15. Dropping wrench and turning on steam for the first five 
strokes. 

16. Opening up throttle and slowly working drill up to full 
speed. 

By the use of a stop watch a standard time for each of these 
processes, depending upon the conditions, can be obtained, and 
the total time, being the sum of these, will represent the entire 
cycle of the process. The problem consists in adding together 
the fastest times for each element to get the fastest possible time 
for the whole cycle. The results from such an investigation 
have never failed to be astonishing in the last degree. 

1. In the process in which the mental effort required is large, 
care must be taken to allow a man a sufficiency of rest. For 
example, a man can "chin himself" of a horizontal bar quite 
rapidly for about 10 revolutions, so to speak, but the next 10 are 
a different matter. 

2. The success of the Taylor method depends very largely 
upon standardizing conditions. To use the illustration of drill 
work, the time required to pick up and place in position a drill 
bit four feet long is considerably less than the time required to 
pick up and place in position a drill bit ten feet long, and the 
performance with the 10-ft. bit cannot be accurately predicted 
upon observation with a four-foot bit. To use a still more 
pointed illustration, the time required to drill down two feet 
through the different kinds of rocks varies greatly, and it also 
varies greatly in some of the rocks when a water jet is used. 
From the above it seems clear that the precise conditions should 
be known in all cases. Some of the conditions will be common 
to all similar classes of work and other conditions will depend 
upon the local features. The two illustrations mentioned in the 
paragraph above are taken from two different classes of condi- 



72 CONSTRUCTION COST KEEPING AND MANAGEMENT 

tions. The study of one means the study of drill work in gen- 
eral; the study of the other means the study of the work on the 
particular job to be attacked. 

3. If a man is going to take orders and alter his way of doing 
work, doing it in a manner that is not only new but at first 
disagreeable, and when, involved with this, he js required to per- 
form what seem to him a lot of unnecessary and rather ridiculous 
" stunts," he has got to have extra pay; if in addition to these 
other things he- is required to exert himself to the utmost 'the 
extra pay will have to be very substantial. The whole proposi- 
tion of the Taylor system is that under proper instructions with 
these conditions the amount of extra work that he will be able 
to do will be considerably more in proportion than the amount 
of the extra pay. The amount of extra pay that he must receive 
in order to do his best is from 30 to 100% more than what he 
originally was getting. There is a certain point at which still 
more pay will not result in the accomplishment of a correspond- 
ing increase in work for two reasons: In the first place, there is 
a limit to what a man can do, and in the second place, if his 
money comes too easily or he gets too much of it, he becomes 
lazy. Just here it is proper to observe that the result of work 
of this kind is to make a man more sober as well as more indus- 
trious for two reasons : He cannot drink much and hold the pace, 
and the effort and attention required to get his work done de- 
creases his desire for alcohol. Since July, 1920, the difficulty 
of obtaining alcoholic beverages has greatly increased, to the 
general benefit of industry. 

4. If a man does not succeed in keeping up to the standard 
performance, one of two situations must obtain : 

(a) If his lack of success is due to special conditions, lack of 
instruction, lack of practice, or both, owing to break-downs of 
machinery or tools, or to irregularity in the material, or to the 
weather, it must not be counted against his future, but he should 
himself receive less money than he would if he had succeeded. 
In other words he must try, and he must try successfully in order 
to earn his extra money. 

(b) If this failure to achieve extra money is because he is 
constitutionally unable to do what he ought to be able to do, then 
the only thing is for him to give place to a better man. Mr. 
Taylor has reduced the thing to the simple proposition of con- 
sidering only two classes of labor — namely, the first-class man 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 73 

and the man who is not first-class. It is not difficult to determine 
which is which. 

5. After months and years of development and instruction 
the pay can be made so high as to attract the very finest class of 
labor in the world and the task can be made so exceedingly diffi- 
cult that none but the very highest class men can hold their jobs, 
and at this point it would seem that the ordinary limitations of 
the human machine had been reached. From a consideration of 
historical facts it does not seem as if there were any limit to- 
what a man can accomplish industrially, but there is a limit to 
what he can do physically. Further improvement must depend 
upon methods, machinery, and special cooperation. 

As Mr. Taylor expresses it, the differential piece rate not 
only pulls a man up from the top but it pushes him equally hard 
from the bottom. We quote from a paper entitled "A Piece Rate 
System," read by Mr. Taylor before the American Society of 
Mechanical Engineers in 1895: "The first case in which a differ- 
ential rate was applied, during the year 1884, furnishes a good 
illustration of what can be accomplished by it. A standard steel 
forging, many thousands of which are used each year, had for 
several years been turned at the rate of from four to five per day 
under the ordinary system of piece work, 50 cts. per piece paid 
for the work. After analyzing the job, and determining the 
shortest time required to do each of the elementary operations of 
which it was composed, and then summing up the total, the 
writer became convinced that it was possible to turn 10 pieces a 
day. To finish the forgings at this rate, however, the machinists 
were obliged to work at their maximum pace from mornings to 
night, and the lathes were run as fast as the tools would allow, 
and under a heavy feed. (Ordinary tempered tools 1 in. by 
3^ in. made of carbon tool steel, were used for this work.) 

"It will be appreciated that this was a big day's work, both for 
men and machines, when it is understood that it involved removing, 
with a single 16-in. lathe, having two saddles, an average of more than 
800 lb. of steel chips in 10 hr. In place of the 50-ct. rate, that they had 
been paid before, they were given 35 cts. per piece when they turned 
them at the speed of 10 per day, and when they produced less than 10, 
they received only 25 cts. per piece. 

"It took considerable trouble to induce the men to turn at this high 
speed, since they did not at first fully appreciate that it was the intention 
of the firm to allow them to earn permanently at the rate of $3.50 per 



74 CONSTRUCTION COST KEEPING AND MANAGEMENT 

day. But from the day they first turned 10 pieces to the present time, 
a period of more than 10 years, the men who understood their work have 
scarcely failed a single day to turn at this rate. Throughout that time 
until the beginning of the recent fall in the scale of wages throughout 
the country, the rate was not cut. 

"During this whole period, the competitors of the company never 
succeeded in averaging over half of this production per lathe, although 
they knew and even saw what was being done at Midvale. They, 
however, did not allow their men to earn over from $2 to $2.50 per 
day, and so never even approached the maximum output. 

"The following table will show the economy of paying high wages 
under the differential rate in doing the above job: 

Cost of Production per Lathe per Day 

Ordinary System of Piecework Differential-rate System 

Man's wages $2 . 50 Man's wages $3 . 50 

Machine cost 3.37 Machine cost '.. 3.37 

Total cost per day. $5.87 Total cost per day $6.87 

5 pieces produced; cost per 10 pieces produced; cost per 
piece 1.17 piece 69 

"The above result was mostly though not entirely due to the differ- 
ential rate. The superior system of managing all of the small details 
of the shop counted for considerable. 

"The exceedingly dull times that began in July, 1893, and were 
accompanied by a great fall in prices, rendered it necessary to lower 
the wages of machinists throughout the country. The wages of the 
men in the Midvale Steel Works were reduced at this time, and the 
change was accepted by them as fair and just. 

"Throughout the works, however, the principle of the differential 
rate was maintained, and was, and still is, fully appreciated by both 
the management and men. Through some error at the time of the 
general reduction of wages in 1893, the differential rate on the particular 
job above referred to was removed, and a straight piecework rate of 
25 cts. per piece was substituted for it. The result of abandoning the 
differential proved to be the best possible demonstration of its value, 
Under straight piece work, the output immediately fell to between 

6 and 8 pieces per day, and remained at this figure for several years, 
although under the differential rate it had held throughout a long term 
of years steadily at 10 per day" 

The most disappointing feature about the introduction of a 
system of management modeled after the Talyor plan is that 
such introduction always meets with the opposition of the "has 



v PIECE RA TE, BON US AND OTHER S Y STEMS OF PA YMENT 75 

beens." It seems that after a man has reached a certain age 
he becomes unwilling or unable to assimilate new ideas, and 
when he is confronted with the proposition that he has been 
doing work for 20, 25, or 30 years according to a method that 
was not and is not economic, the news strikes him with a shock 
that is painful. He objects, in the first place, that the new 
scheme cannot be right, because if it had been right he would have 
known all about it before; but, after it has been demonstrated 
beyond cavil that the new scheme is right, he is likely to work 
himself up into a stubborn and absolutely uncompromising 
policy of obstruction. The new scheme may be all right, but it 
is executed with a lot of "frills" which are not practicable; the 
new scheme involves too much superintendence and too many 
people who get well paid; the new ideas may have been tried out 
a few times lately with success, but his old ideas have been in use 
for a hundred years, and more people have earned their bread and 
butter by the old ideas than by the new ones; finally, with his 
back against the wall, having committed himself with absolute 
rigidity to the proposition that the -new scheme must fail, he feels 
that he will stultify himself in the eyes of his employees and of his 
friends if the new scheme does not fail. This all results, in the 
worst cases, in a determined and absolutely uncompromising 
effort to make it fail. However, so far as the authors know, it 
never has failed, and it has been applied time and time 'again. 
How to treat the obstructiveness is a matter of individual tact 
and judgment that must be applied upon the merits of each case 
and does not come within the scope of this volume. 

The differential piece rate should never be installed until 
after thorough time studies have been made of the work, so that 
a first-class man's capacity can be predicted with accuracy. 

The Differential Bonus. — This is based on the same principle 
as the differential piece rate while guaranteeing to a man a 
fixed minimum of wages. We applied it in drilling work, in 1908, 
offering the men 2 cts. per foot drilled for every foot above 70, 
and 3 cts. for every foot above 80 per day, while at the same 
time paying them their regular rate of wages. 

Task Work With a Bonus. — H. L. Gantt, one of Taylor's 
pupils, invented a system of differential payment known as 
"Task work with a Bonus," which has been very successful in 
practice and has great flexibility of application under varying 
conditions. The workman under this system is paid his regular 



76 CONSTRUCTION COST KEEP INC AND MANAGEMENT 

day's wages in any event and a certain lump bonus if he succeeds 
in accomplishing the standard task. The amount of this bonus 
is usually about one-third of his regular wages. Mr. Taylor says 
that this system is especially useful during the difficult and deli- 
cate period of transition from the slow pace of ordinary day 
work to the high speed which is the leading characteristic of good 
management. During this period of transition in the past, a 
time was always reached when a sudden leap was taken from 
improved day work to some form of piece work; and in making 
this jump many good men inevitably fell and were lost from the 
procession. Mr. Gantt's system bridges over this difficult 
stretch and enables the workman to go smoothly and with 
gradually accelerating speed from the slower pace of improved 
day work to the high speed of the new system. 

The Premium Plan. — This is the term used by F. A. Halsey 
to describe what Mr. Taylor calls the Towne-Halsey system. 
It is based on the proposition of paying a bonus for achieving 
an estimated performance, the means to be employed and the 
methods being left to the ingenuity and initiative of the men, 
rather than to the management. 

Principles Governing the Fixing of a Piece Rate or Bonus. — 
We are probably well within limits when we say that the average 
workman engaged on construction work under the wage system 
is capable of increasing his output 70% if given sufficient incen- 
tive to do so, and this without the least physical injury to himself. 
When it is desired to ascertain how much work men are capable 
of doing, one of the best plans is to conduct a contest between two 
or more men, or two or more groups of men, a substantia] prize 
being offered for the best performance. Such a contest should 
usually extend over several consecutive days, so that it will not 
be a mere sprint, but a fair endurance test. 

In Gillette's "Rock Excavation" are given the rate of progress 
and cost of driving the Croton Aqueduct tunnel. The men in 
one of the headings determined to "break the record" for one 
week's run, and drove 102 lin. ft. of heading in 7 days, at a total 
cost of $2.93 per cubic yard for labor, fuel, explosives and other 
supplies. The average weekly progress prior to that time was 
47 lin. ft. and the average cost was $5.32 in the same material. 
In brief, these men doubled their average speed for a whole week 
when working with an incentive, although that incentive was 
merely pride in establishing a record. 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 77 

Taking another example from the same book (page 360), 
we find that when miners in the War Eagle Mine, at Rossland, 
B. C, were paid by the lineal foot of drill hole, gangs of four 
men drove 97.5 lin. ft. of "drift" (or small tunnel), as compared 
with an average of 50.8 lin. ft. per month under the wage system. 
Under the wage system each miner earned $3.50 a day; while 
under the "hole contract system" (which is a piece rate system 
with lineal foot of drill hole as the unit), each miner earns $4.25 
a day. Under the wage system the mining cost to the company 
was 86 cts. per ton of ore, while under the "hole contract system" 
it is 48 cts. per ton. 

These examples are cited not only to show the wonderful 
possibilities of economic performance under any system whereby 
the men are paid according to their output, but to indicate in a 
general way what piece rate or bonus can safely be adopted to 
start with. 

In the last case cited, it is the opinion of the authors that the 
mine managers did not give the miners as high a piece rate as 
they were entitled to receive. Surely when a man doubles 
his output without any change in the plant or tools, he is 
entitled to an increase more than 20% in excess of his previous 
income. 

If a competitive contest to disclose the workmen's abilities 
is not practicable, the authors assume that the output probably 
can be increased 60 to 70% over the output under the wage 
system, wherever the output depends mainly on the skill and 
strength of the workmen. In drilling rock, for example, if the 
average output of each drill is 60 lin. ft. under the wage system, 
then, in all likelihood, it can be increased to nearly 100 ft. under 
a bonus system. The driller who receives $4.50 a day under the 
wage system is really earning 7.5 cts. for each of the 60 lin. ft. 
If it is planned that he shall increase his income 50%, he will 
receive $6.75 for the assumed 100 lin. ft. of hole. Hence his 
piece rate would be 6.75 cts. a foot, or his bonus would be $2.25 
on 40 lin. ft. (60 lin. ft. being taken as the standard minimum 
performance), which is equivalent to a bonus of 5.625 cts. per 
linear foot on every foot in excess of 60 ft. to be added to a daily 
wage of $4.50. At first sight it seems that the contractor gains 
only 1.875 cts. per linear foot for the 40 lin. ft. on which a bonus 
is paid, or only % ct. per lineal foot on the entire 100 ft. The fact 
is that the contractor gains much more, not even considering the- 



78 CONSTRUCTION COST KEEPING AND MANAGEMENT 

wages of the driller's helper, for the daily plant charges on the 
drill remain almost constant, regardless of the output. If fuel, 
fireman, interest, repairs, depreciation, foreman, etc., are $4.00 
per day per drill, these fixed charges amount to 6.66 cts. per 
linear foot of hole when the output is only 60 lin. ft. a day, as 
compared with 4 cts. per linear foot when the output is 100 ft., or 
a saving of 2.66 cts. per linear foot. Wherever a plant of any 
considerable value is used, it is clear that it would be profitable 
to double the pay of the workmen if they could double the output 
of the plant, for the unit saving in plant charges alone would 
amount to a handsome profit. This is upon the assumption that 
the fuel bill remains practically unchanged by the increased 
output, and it seldom is materially affected by increased output 
on contract work. 

How to Fix the Wage Rate. — When a piece rate or bonus 
rate is to be established it is of great importance that it be estab- 
lished with correctness, so that it will not be necessary to alter 
it subsequently, since nothing is likely to produce more dissatis- 
faction among the men than a change of base on the part of the 
management, which gives the men the impression that they are 
being imposed upon. A fairly safe rule is to pay a piece rate 
which will insure to the average workman under average condi- 
tions with average effort the ordinary wages which he could earn 
by the day. The trouble with this basis is that after the piece 
rate has been in operation a little while the earnings per man 
increase so much that the employer begins to think that the 
piece rate is too high, and then he attempts to readjust it with 
disastrous results. After long experience in this subject the only 
thoroughly satisfactory method of fixing the wage rate that we 
know of is to guarantee to the men not less than the "prevailing 
rate of wages," and preferably a little more than the prevailing 
rate of wages, as a daily or hourly or monthly rate, and on top 
of this to pay them extra for extra accomplishment. To make 
men do their level best, an increase of from 30 to 40% of this 
regular wage is necessary. 

Harrington Emerson developed an excellent way of grading 
bonuses while reorganizing some of the work at the Toledo shops 
of the Atchison, Topeka & Santa Fe Railroad in 1907. Mr. 
Emerson first determines what a man's theoretical practicable 
efficiency is, and this he calls 100% efficiency. Thus, if a first- 
class man ought to be able under the standard conditions to 



- PIECE RATE, BONUS ANDOTHERSYSTEMS OF PAYMENT 79 

make 100 pieces of a certain pattern per day, a man who succeeds 
in making 80 is rated at an efficiency of 80%. The bonuses 
are graded as follows: A man whose efficiency is 67% receives 
the regular rate of wages. If his efficiency is 80% he receives 
about 3^ % of the regular rate of wages as a bonus. When his 
efficiency is 90% he receives a 10% bonus. At 100% efficiency 
he receives 20% bonus and from then on he receives 1% addi- 
tional bonus for every per cent increase in efficiency. Thus if he 
can do 50 % more work than the standard man or if his efficiency 
be 150%, he gets 70% bonus. 

It is well to avoid starting off on any fixed piece rate in outside 
construction work, as thereby it is possible to steer clear of a 
great many obnoxious preconceived notions of the men who may 
fear that the management is getting up a scheme to deprive 
them of their just compensation. 

In applying any rule of this kind it is important to start off, 
as a rule, with one man, or small group of men, at a time, gradu- 
ally expanding the system to include the whole job. Don't forget 
that the expansion must absolutely be gradual and at first very 
slow. 

The "Stint" System. — Having decided the number of units 
of output that may be accomplished in a day or in a week, a 
"stint" or task may be assigned to an individual or to a gang, 
with the promise that when the "stint" is performed the work- 
men will be required to do no more that day or that week. By 
this method, the reward consists in a gift to the workman of all 
time that he may save by working vigorously. The authors have 
frequently found that a gang would finish its day's stint 3 hr. 
before the regular quitting time, or that, if the "stint" was a 
week's work, the men would save 1^ to 2 full days. There 
are some advantages of this method over the ordinary wage 
system. For example, it gives spare time in which to make 
repairs to the plant while the workmen are not using it. It makes 
the men more cheerful and ambitious while working, for they 
look forward eagerly to the hours thus gained for recreation. 
Hence a large "stint" can be set and the men will do more units 
of work under it than under the regular wage system. 

The "stint" system has the obvious disadvantage that it does 
not yield the workman an increased income. Therefore it is only 
a short step in the right direction. We mention it in this chapter 
principally because it is often a good method to adopt preparatory 



80 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to adopting a bonus system, for it serves to show, in a measure, 
what the men are capable of doing, and thus acts as a guide in 
deciding what the bonus shall be. 

Over 40% Greater Output per Man by Piecework in contrast 
to the ordinary force account method was recorded in California 
by Everett N. Bryan, Chief Engineer of the Waterford Irrigation 
District, California, and described as follows in Engineering 
News Record: 

Yardage output per man in excavating for road construction 
in California was 10.9 cu. yd. and 14.3 cu. yd. by piecework, 
compared with 6.8 cu. yd. and 10.9 cu. yd. by force account. 
On excavation for irrigation structures, the piecework output 
per man was 7.2 cu. yd., as compared with a best record of 6.3 
cu. yd. by force account. In both comparisons the conditions 
favored more rapid excavation on the force-account jobs. 

The road excavation amounted to 59,027 cu. yd. of loam, 
"dobe" and cemented gravel, containing in places large percent- 
ages of loose rock. Loosening by blasting was necessary to get 
the best results. All excavation was pick and shovel work, and 
the material was loaded into cars. 

The force-account excavation amounted to 12,283 cu. yd. 
One cut of 9,000 cu. yd. had a maximum depth of 25 ft. This 
was handled by driving a center drift at the bottom and trapping 
as much as possible of the material into cars. The excavation 
in the smaller cuts was shoveled. Competent foremen were in 
charge in all cases. The average output, including drilling, blast- 
ing, drifting, mucking, transporting and dumping was 6.8 cu. yd. 
per man per day. Counting labor in drifting and mucking alone, 
the output per man per day was 10.9 cu. yd. 

Nine station gangs excavated the remaining 46,744 cu. yd. 
Part of the material was trapped into cars in center drifts at the 
bottoms of the deeper excavations, part was trapped into cars 
beneath lean-to platforms against the faces of the excavation, but 
the larger part was shoveled directly into the cars. Generally, 
the conditions were not so favorable to rapid progress as they 
were in the 12,280 cu. yd. of excavation that was done by force 
account. 

The output per man per day for the nine gangs was, however, 
10.9 cu. yd., including all operations, and 14.3 cu. yd., including 
only labor in drifting and mucking. 

In excavating for irrigation structures the force-account 



^PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 81 

operations were divided into two parts. About 1,339 cu. yd. of 
excavation was for 28 canal structures and was contained in pits 
not over 30 in. wide, which were shallow enough to be dug without 
reshoveling. There was some hardpan in the pit bottoms and 
the top soil had to be loosened by picking. Very little blasting 
was necessary. The average output was 3.94 cu. yd. per man 
per day. The second part of the force-account excavation 
consisted of trenches for five inverted siphons, and amounted to 
1,019 cu. yd. The material was not inconvenient to handle, 
there being very little cemented gravel requiring blasting. The 
output was 6.3 cu. yd. per man per day. 

On another part of the work piecework contracts were let for 
the trenching for three more inverted siphons. The excavation 
amounted to 2,469 cu. yd. of which 2,218 cu. yd. were in one 
trench 4^ ft. wide and averaging 5}4 ft. deep. The other two 
trenches were of smaller cross-section, the smallest one being 
2.25 ft. wide and averaging 3.2 ft. in depth. The smallest 
trench was very hard at one end and required blasting; the 
middle-sized trench was handled entirely without powder, and 
the largest trench required the use of powder throughout. An 
average of 0.69 lb. of powder per cubic yard was used, and the 
bottom was carefully trimmed with picks to leave a smooth 
surface on which to lay the concrete pipe. The average progress 
per man per day, including drilling, shooting, picking, shoveling, 
and forge work, was 7.8 cu. yd. 

In some cases it is not practicable to compensate an entire 
gang on a piece-rate basis, but it is often possible to engage one or 
more of the men to undertake the work on such a basis, if the 
employer will pay wages to the other men and deduct the cost 
thereof from the total sum earned by the gang. This plan is 
applicable to many lines of work where the total cost is not 
sufficient to justify an attempt to let contracts in the usual way. 
The work requires less watching than when done by day labor, 
and is generally accomplished with greater satisfaction to both 
employer and employee. 

Some Striking Reductions in Costs Effected by the Piecework 
System. — In the Electric Railway Journal, April 6, 1912, is an 
excellent article descriptive of the methods and results of apply- 
ing unit timing and piece rate payments in the car shops of the 
Interborough Rapid Transit Co., which operates the subways 
and elevated roads in New York City. 



82 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The result has been to cut the labor cost of car maintenance 
fully one-third, and to increase the wages of the workmen more 
than one-third. In many classes of maintenance work the. 
output of the men has been more than doubled. 

To those who have themselves applied scientific piece rate 
and bonus systems of payment, there is nothing unexpected in 
such a result. The following are some of the statements in the 
above mentioned : 

The result of the introduction of this piece price was to 
reduce the cost of stripping and .trimming [cars] to approxi- 
mately 40% of the cost existing under day-work payments, 
notwithstanding that the wages of the workmen were increased 
about 40%. 

The introduction of these [piecework] prices [for equipping 
motor cars] effects a saving in labor costs amounting to 41 % for 
conduit and pipe work, 49% for electrical work and 52% for 
carpenter and machinists' work. 

The Interborough Co. has adopted two methods of payment, 
one being a straight piecework and the other a bonus method. 
For simple routine operations that can be analyzed accurately, 
payments are invariably made by the piece. For complicated 
operations in which the elements of cost differ considerably on 
different jobs, a bonus system of payment is used. Car cleaning, 
motor wiring, installation of new equipment on cars, etc., are 
paid for by a bonus system. 

Both systems of payment have one important element in 
common: They are based upon unit timing with a stop watch. 
Each "job" is analyzed into its elementary operations, and an 
average workman is timed repeatedly on each operation until a 
fair average time for each operation is obtained. Then, based 
on this unit timing a "key" price is assigned to each operation. 
A summation of the products of the "key" prices by the number 
of operations gives the piece price for the given job. An illustra- 
tion will suffice to indicate the method of arriving at "key" 
prices and piece prices. 

In the problem of determining the piece price for stripping a 
subway motor car of a certain type, it was found that 1,318 
wood screws must be taken out. While the screws vary in 
length, stop watch timing disclosed the fact that the size of the 
screw does not appreciably affect the time of removing it, for 
most of the time is spent in the initial effort of starting it. The 



* PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 83 

location of the screw, however, does affect the time, screws for 
seat backs, for example, being much more difficult of access than 
screws for sash locks. 

The time of the operation of removing screws of each class 
includes also the time of removing the piece held by the screws, 
where the piece is small, but, where the piece is large — a window 
sash, for example — a separate time for removing that piece is 
ascertained. To the actual time of removing screws and pieces, 
is added 33^% to provide for rests; or the equivalent is accom- 
plished by adding one-third to the hourly rate of pay. If the 
hourly rate of carpenter pay is 24 cts., then the actual time per 
piece is multiplied by one-third more than 24 cts., or 32 cts., to 
get the piece price, thus providing for a rest period equal to 
one-third the time of actual work. 

The following is a condensed summary of the piece price of 
stripping a certain type of subway car: 

Items Removed Cents 

28 window sashes at 0.43 ct 12 . 04 

2 signal cards at 2.60 ct 5 . 20 

1,088 sash screws and other screws at . 045 ct 48 . 96 

54 sash rod screws and other screws at 0.08 ct 4.32 

176 door and seat screws at 0.12 ct 21 . 12 



Total piece price 91 . 64 

The nearest whole cent is taken as the "piece price," so, in 
this case, the piece price would be 92 cts. for stripping the car. 
The "key" prices in the above example are 0.43 ct. for window 
sashes, 2.60 cts. for signal cords, etc. As above stated, this piece 
price payment of workmen engaged in car stripping has resulted 
in decreasing the cost to the company by 40% and increasing 
the workmen's income by 40%. 

The foregoing is an illustration of the piecework pricing 
where only manual labor is involved. An illustration of 
machine work pricing will next be given, a car sill being selected 
for illustration. 

A wooden end sill, 3 by 12 in. by 8 ft., must be perforated with 
20 holes and must have four "gains" cut in the side. The total 
piece price for the labor on the sill is as follows, based on an 
hourly rate of 36 cts. : 



84 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Item Cents 

22 ft. B. M. dressed in a planer at 0.04 ct . 88 

Cut to length with cross-cut saw . 75 

Laying out with templet 3 . 20 

Boring holes with machine 2 . 25 

Gaining, four gains 2.11 

Sawing ends with hand saw 2 . 10 

Total 11.29 

The 2.25-ct. price of boring the 20 holes is derived thus: 

Item Cents 

22 ft. B. M. handled at 0.033 ct 0.726 

68 in. bored (20 holes) at 0.01 ct 0.680 

15 longitudinal shifts (6-in.) at 0.035 ct 0.525 

3 cross shifts at 0.02 ct 0.060 

1 carriage shift at 0.26 ct . 260 

Total boring price 2. 251 

The 2.11-ct. price for cutting four gains is estimated as follows: 

Item Cents 

22 ft. B. M. handled, at 0.033 cts 0. 726 

12 cuts, at 0.06 cts 0. 720 

11 longitudinal shifts, at 0.06 cts 0. 660 

Total gaining price 2 . 106 

The machines used in boring and gaining are a heavy three- 
spindle boring machine with hand-operated carriage, and a 
horizontal gainer carrying a 5-in. head with a power Operated 
table 20 in. wide. 

The item of "handling" the 22 ft. B. M. includes lifting the 
piece on and off the table or carriage and setting the piece for 
the first cut. A "longitudinal shift" is a shift of the table or 
carriage; and the time varies slightly with the distance shifted, 
so that each length of shift must be timed to establish a correct 
"key" price. A "cross-shift" is a shift of the bit across the 
timber without moving the table. A "carriage shift" is a shift 
of the timber on the carriage, such as moving or turning the 
timber. 

To each piece price for a given sort of work is assigned a 
"contract number;" thus the number 951 designates "Westing- 
house air compressor — strip, clean, repair, assemble and test," 
for which the piece price is $3.50. 

On daily report cards are entered the names and "pass 



PIECE RATE, BONUS AND OTHERSYSTEMS OF PA YMENT 85 

numbers" of the workmen, the car or job number, the "contract 
number," the number of pieces of work performed, the hours 
worked, and the amount earned. 

As above stated, a bonus system of payment is applied to 
certain kinds of work that either have not been, or cannot be, 
very accurately analyzed and timed. But even when a bonus 
payment is to be made, piece prices are first determined in the 
same general way as for piece work payment, and to these piece 
prices about 20% is added to secure the "bonus list price." 

Then the standard day's work consists of such a number of 
pieces that, when multiplied by the "bonus list price"; will yield 
the ordinary day's wage. For every additional piece turned 
out in excess of the standard day's work, the workman receives 
half the "bonus list price" as his bonus, which is added to his 
standard daily wage. By this method, if the workman doubles 
his day labor output, he receives one and eight-tenths times as 
much daily pay; so that this form of bonus payment is not quite 
■as advantageous to the workman as a straight piecework payment 
under which he would receive double pay for double output. 

In 1907, prior to the adoption of the bonus system, it cost the 
company 14 cts. to clean each car at the barns. It now costs 5.6 
cts. per car, under the bonus system, and the workmen earn 
30% more per day than they formerly earned under the old daily 
wage system. In car cleaning the men work in gaDgs, and the 
total bonus earned is prorated to the men in the gang. 

Having once adopted a piece price, no cutting of the price is 
made unless new methods of doing the work are developed. 
This insures the continued cooperation of the workmen, and 
their confidence in the good intentions of the company. 

It may be interesting in this connection to quote a few sen- 
tences from the recent report of the congressional committee 
that "investigated scientific management," and found it mainly 
a tinkling cymbal. 

By the stopwatch you may be able to determine the time in 
which a piece of work can be done, but you do not thereby alone 
determine the length of time in which it ought to be done. The 
time study of the operations of any machine can be made with a 
reasonable degree of accuracy, because all of the elements can 
be taken into consideration in making the computation. A 
machine is an inanimate thing — it has no life, no brain, no senti- 
ment, and no place in the social order. With a workman it is 



86 CONSTRUCTION COST KEEPING AND MANAGEMENT 

different. He is a living, moving, sentient, social being; he is 
entitled to all the rights, privileges, opportunities, and respectful 
consideration given to other men. He would be less than a 
man if he did not resent the introduction of any system which 
deale with him in the same way as a beast of burden or an inani- 
mate machine. 

And then follows much more of the same molding of snowmen 
in the image — the very distorted image — of " scientific manage- 
ment," as target for rhetorical periods. 

Piecework neither makes men "beasts of burden" nor does it 
reduce them to the status of "inanimate machines." On the 
contrary piece work, convertry work into a game of skill, and 
aminate the machine-like laborer. That it operates to the great 
advantage of both employer and employee is well illustrated in 
the results secured in the shops of the Interborough Rapid Transit 
Co., as it has resulted in scores of industrial establishments. 

Application of Wage Bonus Plan to Construction Operations. — 
In the instances to date where a successful plan of paying 
bonuses to laborers and foremen on outdoor work has been 
evolved, the basis of the system has usually been the standard 
time and bonus method of wage payment. 

This plan is based upon the establishment of a standard time 
for the performance of a certain amount of work, and when this 
set task has been accomplished, the payment of a substantial 
bonus for additional work done. In this way the workman is 
assured of a fair wage every day even should conditions be 
unfavorable for a large output, and then at other times he is 
enabled to earn higher wages than would otherwise be possible. 

Since the work done by a gang of men is the result of joint 
effort, the performance percentage for the entire gang is the 
factor that determines the bonus for each man. Further, 
the bonus percentage for the gang is the bonus percentage 
for the foreman and is applied to his salary for the pay period, 
thereby furnishing him with an effective incentive to secure 
rapid and efficient work. In a statement prepared by W. C. 
Nisbet of the Emerson Engineers, New York City, for the 
Committee on Methods of the Associated General Contractors, 
some applications of this time standard and bonus method in 
construction operations are cited. The statement is printed 
in the January Bulletin of the Association, from which the • 
matter following is abstracted. 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 87 

Hand Excavation on Railroad Cui. — Digging a short ditch 
through a railroad cut, with trains in operation. Hand work 
loading into small dump cars, hauled out by boy and mule. 

Those in charge decided on the method and a numbeer of 
men who could work to advantage, then set the time stand- 
ard, which was, let us say, five men for 13 days, or 65 man 
days. Then suppose the job actually took 70 man-days — the 
efficiency attained was 65 divided by 70, or 93%. This would 
pay a bonus to all hands, including foreman and mule driver, 
of 13% on their wages, as reference to the second table below 
will show. 



Rate 
per day 



Time 



Wages 



Bonus 



Total 



Foreman 
Laborer. 
Boy. . . . 



$5.00 
4.00 
3.00 



14 days 
14 days 
14 days 



$70.00 
56.00 
42.00 



59.10 

7.28 
5.46 



$79.10 
63.28 
47.46 



If one laborer at $4 per day laid off 3^ day, his earnings 
would then be $4 times 12^ days, or $50 in wages, with a bonus 
of $6.50, or a total of $56.50 

The bonus percentages for various efficiencies are as follows: 



Efficiency 


Bonus 


Efficiency 


Bonus 


% 


% 


% 


% 


75 


1.0 


90 


10 


76 


1.6 


91 


11 


77 


2.0 


92 


12 


78 


2.4 


93 


13 


79 


2.8 


94 


14 


80 


3.3 


95 


15 


81 


3.8 


96 


16 


82 


4.3 


97 


17 


83 


5.0 


98 


18 


84 


5.5 


99 


19 


85 


6.0 


100 


20 


86 


7.0 


101 


21 


87 


7.6 


102 


22 


88 


8.4 


103 


23 


89 


9.2 


105 


25 



88 CONSTRUCTION COST KEEPING AND MANAGEMENT 

■ Surfacing New Railroad Track. — Ballast and surface a piece 
of new railroad track: Suppose the grade is finished, ties placed, 
rails spiked and bolted and ballast dumped on the track. Gang 
of 14 men with a foreman comes on the job to raise and to 
surface to grade stakes. The standard is, let us say, 0.055 man 
hours per foot of track. At the end of a 2-week period, when 
wages are computed suppose the gang has actually put in 1,950 
hr. (15 men times 10 hr. per day times 13 days), and that they 
have raised and completely surfaced 7 miles of track or 36,960 ft. 
The standard hours to be compared to the 1,950 actual hours 
are then 39,960 ft. times 0.055 man-hours per foot, or 2,031 
standard hours; 2,031 divided by 1,950 gives an efficiency per- 
centage of 104%. This pays a bonus of 24% on the wages of 
each individual in the gang for the pay period in question. 

In this case some one may ask how is it possible to determine 
whether the workmanship is acceptable. Some one must pass 
upon the acceptability of all work done, whether on bonus or 
otherwise. We have standards of quality, whether written in 
specifications and drawn on tracings or simply implied and 
enforced by inspection. The laborers and gang have to be 
impressed that the work must be done according to the usual 
standards of quality. In rare instances trackmen have had to 
be impressed with this by causing them to lose their bonus or 
requiring that they do the work over without a bonus. 

Carpenters on Bridge Work. — Foreman and 12 bridge car- 
penters assigned to build new deck and install deck on new 
bridge. Air compressor and pneumatic equipment for boring 
and tapping furnished. 

To illustrate the method of computing wages, suppose that 
the foreman got $7 per day, that 13 bridge carpenters got $6 per 



Wages 



Bonus 



Total 



Foreman 

Bridge carpenter 

Man to dress tools 

Man to tend compressor 



$91.00 
78.00 
65.00 
52.00 



$7.28 
6.24 
5.20 
4.16 



$98.28 
84.24 
70.20 
56.16 



day each, that one man received $5 per day to dress tools, etc., 
and that one man received $4 per day to tend the air compressor. 
Assume a standard of 2 days' time for each foot of finished 



PIECE RA TE, BONUS AND OTHER SYSTEMS OF PA YMENT 89 

bridge deck and that at the end of a pay period of 13 working 
days they had completed 905 ft. 

The actual days of labor were, say, 16 X 13, or 208; the 
standard days of labor were 905 ft. X 0.2, or 181; the efficiency 
was 87% (standard 181 divided by actual 208), which pays a 
bonus of 8-% on wages. 

Construct Concrete Arch Bridge. — Build a small concrete arch 
bridge for new line of railroad, (a) Dig foundations. 

Suppose, on examination, here a standard is set of 0.25 of a 
man-day per yard of excavation. If six men and a foreman 
completed the job in 8 working days with a yardage of 230 yd., 
the computation for bonus payment would be as follows: 

Seven men for 8 days, equals 56 actual days and 230 yd. 
times 0.25 man-days per yard equals 57.5 standard days. This 
gives an efficiency percentage of 103 (standard 57.5 divided by 
actual 56), which in turn entitles all hands to a bonus on their 
wages earned during the period, of 23%. Now, in practice 
this bonus percentage and the bonus in dollars is not computed 
for each job separately, but rather by pay periods, and to 
illustrate how different jobs are combined, we will suppose the 
gang mentioned above spends the remainder of the time in the 
pay period in unloading and storing sacked cement. 

(6) Unload and store sacked cement. Suppose six men and 
foreman (same gang as above) worked 4 days and unloaded, 
trucked and stored 8 cars of cement, for which a standard had 
been set of 3 man-days per car. Their actual time is seven men 
for 4 days, equals 28 man-days and the standard is eight cars 
3 man-days per car, or 24 man-days. If the 84 days times 
covered constituted a 2-week pay period, the wage and bonus 
earnings would be something like this: 





Standard 
days 


Actual 

days 


Efficiency, 

% 


Job No. 1 


57.5 
24 

81.5 


56 

28 

84 




Job No. 2 . . 




Total 


97 







Bonus percentage for efficiency of 97% is 17% of wages; 
therefore the wages and bonus would be as follows: 



90 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Foreman, $5 per day for 12 days, or $60. 
Six men, each $4 per day for 12 days, or 



Bonus 


Total 


$10.20 


$70 . 20 


8.16 


56.16 



(c) Build forms (carpenters). Suppose carpenters now go 
to work on the forms. 

To illustrate such a condition we will assume that the job 
was started at the beginning of a pay period and at the end of 
the period was not yet completed, but that 2,000 sq. ft. had 
been put in place, that the number of men engaged was four 
plus a foreman, and that the standard was 0.025 days per 
square feet. The actual man days were then five men for 12 
days, or 60, and the standard was 2,000 sq. ft. times 0.025 man 
days per square foot, or 50 man-days. The efficiency on the 
job then was the standard of 50 divided by the actual 60 or 
83%. 

Standards Should Cover Small Gang Only. — It is most de- 
sirable to have the standards cover individuals only, where 
this can be done, separating the operations into parts. Al- 
though this makes more clerical work it is certain to stimulate 
the workmen to do their best. The next best plan is to have 
the standards separated so as to cover the work of small groups. 
If any drones are in the gang the others will raise a noise and ask 
to have them replaced if a bonus is involved. 

It is not advisable to set standards covering the work of over 
30 men in a gang. When more than that are included in one 
efficiency standard, the effect is lessened. In such cases it 
becomes something like a profit-sharing plan where all workers 
share alike in the annual profits. The possibilities in profit- 
sharing plans are too distant, too vague and not directly tied 
in with the work of any one individual, hence their effect is not 
very great. 

Some suggested units of productions are as follows: In excava- 
tion, cubic yards removed; in railway construction, feet of track 
or number of ties or rails laid; in masonry, cubic yards in place; 
in building construction, if concrete, feet of floor laid; if steel, 
tons of lineal feet in place; if wood, square or cubic feet in place. 

It is understood that this method entails more clerical work 
than is needed where straight hourly wages are paid. However, 
as by its means a reduction of 15 to 25% in labor cost is often 
attained, the extra cost of the clerical and other supervision 
is well expended. Contractors should bear in mind that this 



PIECE RA TE, BON US AND OTHER S YSTEMS OF PA YMENT 91 

has been proved to be an excellent means of increasing output 
per workman in many industries, and that at a time such as the 
present when greater production is essential to prosperity, 
every effort should be made to conduct thier operations more 
efficiently. 

A Bonus System on the Yakima-Tieton Main Canal applied 
by E. C. Finley, engineer U. S. Reclamation Service, was des- 
cribed in Engineering News-Record as follows: 

In order to assist in the solving of the problem of getting suffi- 
cient labor while weather conditions were favorable, a bonus 
system of wages was adopted. The work had been started in 
1916 and continued in 1917, and the plans were to complete the 
job in 1918. There were 126 stations completed in 1916; 97 
stations in 1917, and 254 stations remaining. There had always 
been a labor shortage on this work, but especially during 1917. 
In 1916 the average progress was 150 ft. per day; in 1917 this 
average was brought up to 160 ft. per day. 

As is the practice in establishing a bonus rate, the cost is 
divided equally between the employer and employee for any 
amount of work done over and above what is considered an 
average day's work, amounting to about 3 cts. per man per foot. 
Laborers must have a certain amount of bonus in order to become 
interested, and it was decided that 140 ft. per day should be 
counted as a good day's work. Therefore, each man in the crew 
received 1}^ cts. per foot each day for any amount completed 
over 140 ft. The granting of this bonus was contingent on a 
man working 10 days, and the amount of bonus was determined 
on each 10-day period. 

During the first two bonus periods the average amount of 
work was about 200 ft. per day. During the third bonus period 
this average was brought up to 220 ft. per day. The interest 
in this system of paying for work seemed to grow from the begin- 
ning of the work, and during the last period, which was from 
Nov. 10 to the date of completion, Nov. 18, 1918, the average 
was 300 ft. per day, with a maximum of 404 ft. 

Without a doubt, the result of this system of wages was very 
material in obtaining sufficient men to complete the work. This 
scarcity of labor was such that only three crews were working 
until Oct. 25, and four crews from this date until the com- 
pletion of the work. There was an increase daily of the number 
of men in camp from 40 at the beginning of October to a maxi- 



92 CONSTRUCTION COST KEEPING AND MANAGEMENT 

mum of 160, the increase being gradual. There was very little 
trouble in holding the men on the work, as wages in general were 
good and so was the mess. 

Figuring the cost of the work done in 1918 carried out under 
the prevailing wages without bonus, using the work done in 1916 
as a basis, it amounts to $3 per lineal foot, which was the estimate 
prepared for the work. The main result of the bonus system 
was that it proved to be a sound basis for productive efficiency. 
The entire canal was completed, and the figures show that the 
advance in costs in 1918 is considerably below the general advance 
in labor and materials. 

The work was done under the supervision of R. K. Tiffany, 
project manager of the Yakima Project, with Mr. Finley as 
engineer in direct charge of the work. 

Rapid Tunnel Driving under the Bonus System. — The salutary 
effect of payment by the bonus system is well illustrated by the 
results obtained in tunnel driving. In Engineering News, 
Aug. 26, 1915. J. R. McFarland gives the following data on 
driving the Mount Royal, Arizona Copper, St. Louis Water- 
Works and the Laramie Poudre, tunnels. The bonus system 
was used at all the tunnels mentioned, and is the only prac- 
tice of note that was common to those five contracts. Differ- 
ent types of drills, some with and some without carriage mount- 
ings, both long and short rounds, and different methods of 
handling the muck were used. 

The cost of tunnel driving is practically constant for each 
day's work, but the cost per foot varies with the rate of progress. 
From past performances the average advance per day, week and 
month is known, and it is expected that under normal conditions 
this rate of progress will be maintained. If exceeded, there is of 
course a considerable- saving to the contractor; and where the 
bonus system is in force he pays his men a certain amount, as 
their just portion of the saving effected, for each linear foot of 
advance in excess of the base rate. The saving realized by the 
bonus system in the labor cost is shown in the tabulation which 
follows : 

Labor Saving* by Bonus System 

Per cent. 

Mount Royal Tunnel ... 15 

Arizona Copper Tunnel , 20 

St. Louis Water- Works Tunnel 50 

Laramie Poudre Tunnel 31 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 93 

The cost of driving the tunnels during the record months under 
the bonus system has been compared with the cost of driving 
before the bonus system was adopted. Before considering the 
several projects separately the accompanying tables should be 
examined. Table 3 gives some general data as to character of 
rock, size of heading, etc., while Table 4 shows the approximate 
number of men at work. 



Table 3. — Data op Tunnels Whose Records Are Compared 



Mount 
Royal 
tunnel 



Arizona 
Copper 
tunnel 



St. Louis 

Water- Works 

tunnel 



Laramie 
Poudre 
tunnel 



Rock. 



Size of tunnel heading . 



Average cross-section. 



Record advance in 31 days 



Trento lime- 
stone with 
i g n e o u 8 
dikes 
8X12 ft. 



3.56 cu. yd. 
per foot ad- 
vance 
810 ft. 



Granite por- 
phyry; good 
drilling 

8 X8 ft. 



70.04 sq. ft. 



799 ft. 



Both hard 
and soft 
limestone 

8 ft. diame- 
ter (circu- 
lar) 
95 sq. ft. 



745 ft. 



Moderately 
hard, gray 
or red gran- 
ite 

7H X9H ft. 
(elliptical) 

62 sq. ft. 



653 ft. 



Table 4. — Total Labor on Tunnel Construction 





Mount Royal 
tunnel 


Arizona 

Copper 

tunnel 


St. Louis 

Water-Works 

tunnel 


Laramie 
Poudre 
tunnel 


Superintendents 

Foremen or bosses 

Drillers and helpers 

Muckers 

Miscellaneous labor of all 
classes 


2 
3 

24 
24 

59 


1 

12 
15 

12 


1 

3 
24 
22 

51 


1 

3 

15 

18 

22 

• 



The bonus paid to the men at the Mount Royal tunnel was 
7% of their daily pay for every foot over 14 ft. per day. The 
influence of the bonus system on the work at this tunnel is 
shown by Table 5. 



94 CONSTRUCTION COST KEEPING AND MANAGEMENT 
Table 5. — Mount Royal Tunnel 



Costs 



A typical 

month 

without 

bonus 



Record 

month 

with 

bonus 



Labor 

Equipment and supplies 

Total, including overhead 

Advance, at 14 ft. per day 

Per foot (labor) 

Per foot (labor, equipment and supplies) 

Per foot (total) 

Per cubic yard (labor) 

Per cubic yard (total) 

Saving (in labor) in cost per foot, by bonus system 
Saving (in labor, equipment and supplies) per foot 

Saving (total) per foot 

Saving in total cost per cubic yard 



,989.00 

,927.00 

,916.00 

434.00 

$23.00 

29.76 

32.06 

6.48 

9.00 



$15,883.00 

4,750.00 

21,633.00 

810.00 

$19.61 

25.47 

26.70 

5.51 

7.51 

3.39 

4.29 

5.36 

1.50 



At the Arizona Copper tunnel the men received regular wages, 
and for every foot of advance over 350 ft. per month a bonus of 
$7 was divided. This was only a trial, but although it was found 
that the bonus was excessive, it was not reduced, as the duration 
of the test was short. The tunnel was driven the first month 
without a bonus and the three succeeding months with a bonus. 
A comparison of the advances and the costs per foot of tunnel 
in each case is shown by the figures in Table 6. 

Three shifts per day were employed at the St. Louis Water- 
Works tunnel. A minimum advance of 72 ft. per week was set, 
and for all over that amount the following bonus rates were 
paid: Superintendent, 50 cts. per foot; heading foreman, 50 cts.; 
muck foreman, 30 cts. ; drill runners, 30 cts. ; drill helpers, 20 cts. ; 
nipper, 20 cts.; muckers and cage men, 10 cts. Each shift was 
credited with one-third of the extra progress and received one- 
third of the bonus. 

Three shifts per day were employed on the Laramie Poudre 
tunnel. For the first part of the work each under-ground work- 
man was paid a bonus of 25 cts. per day for each 25 ft. in excess 
of 400 ft. per month. This system was soon discontinued, as 
it was found to be not only cumbersome but excessively high, 
and the following system was adopted: When the rate of driving 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 95 
Table 6. — Arizona Copper Tunnel 



Costs 



Without 

bonus 

first 

month 



With bonus 



Second 
month 



Third 
month 



Fourth 
month 



Labor 

Equipment and supplies . . . 

Labor, equipment and 
supplies 

Advance in feet 

Per foot (labor) 

Per foot (labor, equipment 
and supplies) 

Cubic yards of rock re- 
moved, labor, equipment 
and supplies 

Saving on labor, per foot, 
by bonus system 

Saving on labor, equipment 
and supplies, per foot . . 

Saving on labor, equipment 
and supplies, per cubic 
yard 



£3,773. 00 
2,013.33 

5,786.33 
350 

$10.78 

16.53 



6.33 



$5,314.24 
2,013.33 

7,327.57 
582 
$9.13 

12.59 



4.82 

$1.65 

3.94 

1.51 



$5,802.69 
2,013.33 

7,816.02 
664 

$8.74 

11.77 



4.51 
$2.04 

4.76 

1.82 



$6,574.77 
2,013.33 

8,588.10 
762 
$8.63 

11.27 



4.32 
$2.15 
5.26 

2.01 



for any calendar month exceeded 400 ft. and was less than 500 
ft., each underground employee was paid $10 extra; between 500 
and 600 ft. the bonus was $15, and between 600 and 700 ft. 
it was $20. In order to distinguish the bonus money from the 
regular wages the bonus was paid by check. The itemized 
account is given in Table 7. 

Table 7. — St. Louis Water-Works Tunnel 



Costs 



Estimated i Cost per day 
without | with 
bonus bonus 



Labor 

Total bonus per day 

Advance, feet per week 

Labor per foot 

Labor per cubic yard rock removed 

Saving in labor, per foot, by bonus 

Saving in labor, per cubic yard, by bonus . 



$381.75 



72 
$37.09 
10.54 



$381.75 
66.80 
745 

$18.66 

5.30 

18.43 

5.24 



96 CONSTRUCTION COST KEEPING AND MANAGEMENT 
Table 8. — Laramie Poddre Ttjnnel 



Items 



Estimated 

without 

bonus 



Cost per day 
with 
bonus 




Straight wages 

Total bonus per day 

Advance per month in feet 

Labor, per foot 

Labor per cubic yard removed 

Saving per foot due to bonus 

Saving per cubic yard due to bonus 



Rules for Determining Bonus Payment on the Los Angeles 
Aqueduct. — The Los Angeles Aqueduct, some 217 miles long, was 
constructed nearly entirely by force account work. One of the 
features of the management, the extensive use of a bonus system 
of payment of labor, proved to be very successful in hastening 
construction and reducing costs. In Mines and Minerals for 
June, 1912, the rules adopted by the engineers in charge of the 
work to govern bonus payments are given as follows : 

1. Length of Period and Time of Measurements. — Ten days 
shall constitute a period. The first period to be from the first 
to the tenth, of the month, inclusive ; the second from the eleventh, 
to the twentieth, inclusive; the third from the twenty-first to 
the end of the month. Bonus payments shall be allowed upon 
the basis of measurements made at the close of each 10-day 
period. 

2. Employes Entitled to Bonus. — The following named classes 
of employes shall be allowed to participate in bonus payments: 
Tunnel foremen, when in charge of more than one bonus crew; 
shift bosses, miners, muckers. 

3. Tunnel Foreman. — The tunnel foreman shall not be con- 
sidered as one of the "shift crew." If he is in charge of more 
than one bonus crew he shall be allowed bonus based upon the 
"mean" bonus progress per shift of all bonus crews under his 
supervision. 

4. Shift Boss. — The shift boss shall be considered as one of the 
shift crew. He will participate in the bonus on the same basis as 
the men of the crew under his direction. An exception to this 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 97 

rule is made when a shift boss is placed in charge of two or more 
shifts in different headings. In this case he would be placed on 
the same basis as a foreman, towit, not be considered as one 
of the crew, and would be allowed bonus based upon the mean 
bonus progress. 

5. Number of Shifts Allowed. — The number of shifts worked 
in a heading during a day of 24 hr. shall be determined by the 
engineer or superintendent in charge of the work after consulta- 
tion with the chief engineer. 

6. Trimming and Timbering. — All trimming must be done by 
the crew sharing the bonus. If the timbers are placed by the 
miners from the standard crew in a given 10-day period, then 
that portion of the tunnel shall be considered as a timbered sec- 
tion; otherwise it shall not be so considered. 

7. Continuous Work and Exceptions. — Only men who work 
continuously through the 10-day period — with the following 
exceptions — shall be entitled to the bonus: 

(a) Any employe, entitled to bonus earnings, who is injured 
or becomes ill during a period from conditions arising directly 
from tunnel construction, shall participate in bonus in proportion 
to the number of shifts worked by him during said .period. 
- (6) If an employe, entitled to bonus earnings, is transferred 
during a period from a heading to another part of the work for 
reasons other than his own request, he shall participate in bonus 
in proportion to the number of shifts worked by him on such 
heading. 

8. Interruptions of Work. — If the work is interrupted by the 
failure of power, shortage of material or supplies, floods, cave- 
rns, or other causes beyond the control of the men, the men shall 
be entitled to bonus pay in proportion to the number of shifts 
worked by them during period in which such interruptions 
occurred. 

9. When Both Timbered and Untimbered Work is Done by the 
Crew in the Same Period. — To establish a uniform system of 
computing bonus earnings in above case the following formula 
will be used: 

Formula. — 

x y — average base rate per shift. 

a ~*~ b 



98 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Example. — 

Let x = timbered progress = 25.0 ft.; 

y = un timbered progress = 30.0 ft.; 

a = required timbered per shift = 2.0 ft.; 

b = required un timbered per shift = 2.5 ft.; 

s = number of shifts during period = 20.0 
Then 

- = shifts required at base rate; 

r = shifts required at base rate. 

Or, substituting values, 

25 

~n = 12.5 shifts required at base rate 

30 

s~= = 12.0 shifts required at base rate 

Total, 24.5 shifts required at base rate 

9 . _ — = 2.245 average base rate. 

20 X 2.245 = 44.9 ft. = progress required. 
55 — 44.9 = 10.1 ft. = bonus footage. 

10. Computations of Bonus Footage and Earnings. — The com- 
putations of bonus footage shall be made by dividing the total 
number of feet run during the period by the total number of 
shifts worked during the period. From this average footage 
per shift there shall be deducted the base rate of progress re- 
quired, and the remainder, if any, will be the bonus 
footage per shift. The bonus earned per man during the period, 
will be the number of shifts in which he worked, times the average 
bonus footage, times the bonus price per foot. (Provided all 
conditions as outlined in these rules are complied with.) 

Example 1. — Three shifts working 10 days. 

Total progress for period, 150 ft. 

3 shifts X 10 days = 30 shifts worked 

150 feet -r- 30 shifts = 5 ft. per shift 

Base rate of progress = 3.5 ft. per shift 

Bonus footage 1.5 ft. per shift. 

Bonus earned for period per man = 1.5 ft. X 10 shifts X 
25 cts. per foot = $3.75, 



PIECE RATE, BONUS AND OTHERSYSTEMS OF PAYMENT 99 

Example 2. — One shift working 10 days. 
Total progress for period 50 ft. 
1 shift X 10 days =10 shifts worked 
50 feet -T- 10 shifts = 5 ft. per shift 
Base rate of progress = 3.5 ft. per shift 



Bonus footage 1.5 ft. per shift 
Bonus earned for period per man = 1.5 ft. X 10 shifts X 25 
cts. per foot = $3.75. 

11. Interpretation of Rules. — If any of the above rules are not 
clear to the engineers or superintendents in charge of work, such 
rule must be referred to the chief engineer for interpretation. 

12. The chief engineer shall determine what tunnels shall be 
given certain base rates and bonus per foot as outlined in the 
schedules for the various divisions. 

The base rate for determining the bonus depended on whether 
the rock was soft or hard, or whether the excavation was timbered 
or Untimbered; on the number of men on each shift advancing 
the work; whether the work was done by machine drills or hand 
drills, and finally on the square feet of cross-section for the tunnel. 
Bonus schedules were prepared and approved for tunnel driving 
on the Little Lake division, Bowlder Peak and Grapevine sections 
of Division 5-A; the Jawbone division; the North Antelope divi- 
sion; the Elizabeth tunnel and the Saugus division. As the Los 
Angeles Aqueduct is 217 miles long it follows that there were 
different kinds of rock which varied in hardness, consequently 
the bonus footage varied. Two schedules, one for the Jawbone 
division and the other for the Saugus division of the tunnel are 
here given. 



Table 9. — Bonus Schedule for Tunnel Work in the Jawbone Division 



Capacity 








Base 


Number 


Bonus per 


of tunnel, 


Class of 


Timbered or 


Class of 


rate per 


of men 


man per 


second- 


rock 


untimbered 


work 


shift, 


per 


foot per 


feet 








feet 


shift 


shift, cents 


430 


Soft 


Untimbered 


Hand 


4.0 


9 


25 


430 


Soft 


Timbered 


Hand 


4.0 


9 


25 


430 


Hard 


Untimbered 


Hand 


2.5 


10 


25 


430 


Hard 


Timbered 


Hand 


2.0 


10 


25 


430 


Hard 


Untimbered 


Machine 


3.0 


11 


40 


430 


Hard 


Timbered 


Machine 


2.3 


11 


40 



100 CONSTRUCTION COST KEEPING AND MANAGEMENT 
Table 10. — Bonus Schedule for Tunnel Work in the Saugus Division 



Capacity 








Base 


Number 


Bonus per 


of tunnel, 


Class of 


Timbered or 


Class of 


rate per 


of men 


man per 


second- 


rock 


untimbered 


work 


shift, 


per 


foot per 


feet 








feet 


shift 


shift, cents 


1,000 


Hard 


Untimbered 


Hand 


2.3 


13 


40 


1,000 


Hard 


Timbered 


Hand 


2.0 


15 


40 


1,000 


Hard 


Untimbered 


Machine 


3.0 


15 


40 


1,000 


Hard 


Timbered 


Machine 


2.5 


17 


40 


1,000 


Soft 


Untimbered 


Hand 


3.0 


13 


35 


1,000 


Soft 


Timbered 


Hand 


2.5 


15 


35 


420 


Soft 


Untimbered 


Hand 


4.0 


11 


25 


420 


Soft 


Timbered 


Hand 


3.5 


11 


25 


420 


Soft 


Untimbered 


Machine 


5.0 


11 


25 


420 


Soft 


Timbered 


Machine 


4.5 


11 


25 



Bonus for Laborers (Increases Yardage and Lowers Cost of 
Paving). — In Engineering News-Record April 11, 1918, Clarence 
E. Ridley describes how, in the face of severe labor shortage, 
paving work was speeded up by paying a premium to every man 
in the gang, as follows: 

Costs per square yard of paving were reduced from 21 to 12 
cts., yardage was increased from 3,390 to 5,485 sq. yd. in a 2- 
weeks period, and labor turnover was reduced by the City of 
Flint, Mich., which is constructing by day labor approximately 
ten miles of pavements and thirty miles of sewers this season. 
The city had experienced a great deal of labor difficulty. The 
chief industry of Flint is the manufacturing of automobiles, 
which has made heavy inroads on the supply of skilled labor. 
Extensive building contracts under way have further increased 
the labor shortage. 

The particular crew in question had been a problem all season. 
Foremen had been changed four times, and the entire personnel 
of the crew at least as many times. Changing foremen and 
laborers and giving a bonus only to foremen were all to no avail, 
the cost remaining above the estimate and the quantity of work 
done fast falling below the schedule. 

This contingency led the writer to figure out a bonus system, 
whereby every man on the job would share according to the 
amount of work done. The proposition was made to the men 
that each man on the job should receive a bonus of one cent per 
square yard in excess of his regular wages for all over 500 sq. yd. 
of 6-in. foundation placed in a 10-hr. day. The gang was limited 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 101 

to 12 men, exclusive of the foreman. Previous to this as many 
as 16 men were allowed. The gang was composed of a foreman 
at $4.17 per day, an engineer at $4, a fireman at $3.33, a cement 
carrier at $3.75, three concrete men at $3.50 and six shovelers and 
wheelers at $3.50 each. 

At the above wages and allowing to each man the 1-ct. bonus 
per square yard for all over 500 yd., the unit costs would vary as 
follows: 300 yd., 15.6;'400 yd., 11.7; 500 yd., 9.4; 600 yd., 10.0; 
700 yd., 10.4; 800 yd., 10.7; 900 yd., 11.0; 1,000 yd., 11.2. 

As seen in the foregoing, approximately 500 sq. yd. per day 
would give the minimum cost, but where the overhead expense is 
considered, to say nothing of the desirability of getting through a 
job with as little inconvenience as possible to traffic is taken into 
account, almost everybody would be unanimous for the 1000 sq. 
yd. per day, with only a difference of 1.8 ct. per square yard. 

Now as to the practical side of the method. The pay-roll of 
this particular gang referred to, previous to the time of trying 
the bonus method, amounted to $708.68 for a 2-weeks period, 
during which time they placed 3,390 sq. yd. of 6-in. 1 : 6 concrete 
foundation on pavements varying from 21 to 24 ft. in width. 
The average for the 12 days was 283 sq. yd. per day at a cost 
of nearly 21 cts. per square yard. 

The next payroll of the gang on the same kind of work, includ- 
ing the bonus, amounted to $646.45. In the same period of 
time they deposited 5,485 sq. yd. at an average cost of less than 
12 cts. per square yard. During the first period the weather was 
such that no delay was necessary, while during the second period 
rain interfered with the work on 6 different days and on 2 days 
they were unable to operate at all. In spite of this handicap the 
gang averaged 548^ sq. yd. a day. One day with weather 
permitting them to run only 9 hr. they placed 882 sq. yd. The 
result was an increase of 62% in yardage and a decrease in cost 
of 43%, compared with the previous 2-weeks' period. 

Bonus Plans for Motor Truck Operators. — Engineering and 
Contracting, August 20, 1919, gives an article by Harold P. 
Gould, Chairman Truck Owners Conference, Inc., Chicago, 
reprinted from an issue of the 100% Magazine, as follows: 

The Economy Bonus. — The summary of the Economy Bonus 
Plans includes plans for the following purposes: 

(a) Lowering Per Mile Cost. 

(&) Increasing Tire Mileage. 



102 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(c) Decreasing Spring Breakage. 

(d) Decreasing Accidents. 

(c) Increasing Gasoline Mileage. 

(/) Good Behavior. . 

(g) Regular Attendance. 

(h) Not Getting Stuck on the Road. 

(i) Keeping Car Out of Repair Shop. 

(j) Reducing Customer Complaints. 

Lowering per Mile Costs. — Ward & Ward, Inc., of Buffalo, 
have worked out a very successful bonus plan based on the cost of 
operation per mile. With the allowed cost at 7 cts. a mile, 
they give the driver all the saving he can effect on this standard 
and deduct from his bonus the cost of all accidents unless proved 
to be outside his control. 

Production remains at a predetermined standard because the 
deliveries are made to customers on fixed routes, under very 
nearly standard conditions of roads and loads; time does not 
enter in, because if the driver takes longer than he should he is 
simply running his day longer without cost to the company. 
The deduction for accidents has been carefully made under Mr. 
Ward's personal supervision. 

First of all, a fair wage is paid; the man starts at $20 a week, 
the next month receives $22 a week and the sixth month $24. 

In figuring cost per mile on 1^-ton trucks, garage cost, de- 
preciation and insurance were not included and it came to gas, 
oil and tires. 

Bonus payments are made every four months. Three drivers 
earned at the last distribution $75, $50 and $30, respectively; 
three times that sum for 12 months is a very respectable bonus 
earning. 

Better satisfied drivers, more careful with their trucks, and 
working for the interest of the company, as well as lower mainte- 
nance cost on the cars were the good results of the use of this 
bonus plan. Three cars were run nearly 1,000 miles a month for 
11 months each and were laid up only a total of 5 days for repairs. 

Four Combined Bonuses. — The Gilman Trucking Co. of 
Cleveland offers its drivers four simple bonus payments of $5 
each for accomplishing four different results, as follows: 

1. For regular attendance and no absence without excuse 
previously granted by the foreman. 

2. For good behavior, 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 103 

3. For not getting stuck on the road. 

4. For keeping the truck out of the shop in working hours. 
This made it possible for each driver to earn $20 per month for 

exercising proper care, and resulted in lower cost and greater 
production to the company. 

Spring and Tire Bonus. — McCrady Brothers, in the coal and 
building material business in Pittsburgh, are operating two 
simple bonus plans with excellent results, the first on tires and 
the second on springs. 

Each driver is offered $1 for each 1,000 miles he runs his truck 
over the maker's guaranteed 7,000, and $2 for each 1,000 miles 
he runs his duals, or large single tires on the rear wheels, over 
the maker's guarantee. 

When a driver runs his tires 14,000 miles, for instance, he 
earns $7 bonus on each front wheel and $14 for each rear wheel, 
a total of $42 bonus. 

As it costs the company from $12 to $22 per 1,000 miles for one 
of these tires, for the first 7,000 miles, the extra dollar or two paid 
in bonus is earning from 10 to 12 times its cost to the company. 

The good results are not only satisfied drivers and increased 
mileage on tires, for when the rear tires are so handled as to run 
more miles, it stands to reason that the differential will run more 
miles and the engine will run further without an overhaul. 
Careful driving means longer wear on every part of the machine. 

A 10% overload is all that is allowed on these trucks and the 
drivers have no desire to put on more load or to speed the trucks 
because it is working to their detriment in the tire bonus. 

One driver that earned a bonus for running his front tires 
7,000 miles over the guaranteed distance, hauled 770 tons more 
in a 3 months' contest than another driver with a lower tire 
mileage in the same time, proving that the economy bonus on 
tires did not lessen the production of the truck. 

When William McCrady offered his drivers a $3 bonus for 
every month in which no springs were broken, he did it to meet 
a serious situation, for on one truck they were averaging two 
broken springs a month at a cost of $20 each, or $40. Immedi- 
ately after this bonus was offered the worst truck in the fleet ran 
2 months without a broken spring. 

Again, there was reflected a benefit to the rest of the truck, 
because the breaking of the spring means the breaking of other 
parts at the same time. The more careful driving to earn the 



104 CONSTRUCTION COST KEEPING AND MANAGEMENT 

spring bonus pays hundreds of dollars each year on a machine in 
lessened repair bills on other parts of the truck. 

Joseph Home Co. of Pittsburgh, whose department store 
fleet has received effective administrative attention from F. C. 
Schatz, has developed several effective economy bonus plans. 

The first bonus is an efficiency bonus, figured by crediting 
for good conduct and good mileage and debiting the driver 
for failures and complaints registered by customers with the 
complaint department. 

The second bonus is given for the care of the car. No repairs 
are made without the authorization of Defect Cards, initialed 
by the drivers, so that this item as affecting their earnings can 
be kept in the control of the driver to a certain extent. 

The third bonus is for economy in tire cost, or, in other words, 
for high tire mileage. 

The fourth bonus is the half-yearly no-accident bonus. The 
driver forfeits his whole bonus if he has an accident within the 
6 months' period, with one exception; he is not responsible if his 
car, left standing empty at the curb, is hit by another vehicle. 

These four bonus plans in conjunction have been very success- 
ful in rewarding the better operators, causing the poorer men to 
strive for better records and the consequent better earning. 

Wilson & Co. of Chicago have recently inaugurated a plan 
of giving prizes for tire economy. They give the driver 30% 
of the "gravy" on sets of tires or single tires for number of miles 
run over 10,000, guarding against damage to the rims by the 
regulation that tires must be changed when worn down to within 
Y± in. of the steel base. 

Pooled No-accident Bonus. — Tiffany Studios of New York have 
a simple pooled no-accident bonus for the drivers and helpers 
on their trucks. They feel that alertness and watchfulness on 
the part of the helpers will tend in great measure to prevent 
accidents, so they are allowed the same bonus as the drivers. 

Each man is allowed a bonus at the rate of $10 a month, 
payable twice a year, or $60 every 6 months. 

It is understood that if an accident occurs through carelessness 
on the part of any of the drivers or helpers, its cost will be de- 
ducted from the bonus fund, so that all of the drivers and helpers 
will be affected. This makes all of them take an interest in pre- 
venting accidents, not only to themselves, but to each other. 

The company carries insurance protecting it against dam- 



PIECE RA TE, BON US AND OTHER S Y STEMS OF PA YMEN T 105 

age to other cars, but they have so few accidents that they 
have dropped the insurance covering their own trucks and 
by carrying it themselves, are ahead on the deal. 

They have had so few accidents which their insurance has 
not adequately covered that they have not as yet made any 
deductions from the bonus account, so that the men have always 
received their $10 per month in full. 

If any man leaves their employ he forfeits his interest in 
the unpaid bonus fund, and it is distributed among the remaining 
men. This helps to keep the men satisfied with their positions 
and to hold them on the job. 

The Miller North Broad Storage Co. of Philadelphia operated 
a similar nO-accident bonus plan for three months during the 
dullest part of their season. 

This was an unfortunate time to test it out, by reason -of the 
fact that they were unable at all times to make up the expenses 
incurred through accidents as promptly as they should have done 
in a busier season, and it tended to throw discredit upon the bonus. 

At the end of three months, when they expected to get the 
greatest benefit from the plan, conditions compelled them to 
make a substantial raise in the wage of the men, and because 
of certain weaknesses in the bonus plan, they felt it prudent at 
the time to abandon it. 

Paper-credit Bonus. — Parke, Davis & Co. of Detroit have 
a simple economy bonus in use for the drivers of their eight 
city delivery trucks. Each month that a driver has no acci- 
dent, whether his own or another driver's fault — and the loss 
of the smallest piece of equipment is put in the category of 
accidents — he receives a $5 paper-credit bonus, payable in cash 
on the first of May of each year. 

For the least or the greatest accident in a month a driver 
forfeits his entire. $5 credit. A nightly inspection of the cars 
at their garage carefully checks up the condition of the machines 
and their equipment. 

The excellent effect of this plan may be seen from a study 
of the May, 1919, distribution: Four drivers received the full 
amount of $60, one man received $50, and three $55. One 
driver with one accident charged against him delivers in the 
thick of traffic all the year round. 

This is the more remarkable when the comprehensiveness 
of the conditions covered by the bonus is remembered. The 



106 CONSTRUCTION COST KEEPING AND MANAGEMENT 

four perfect records mean that four cars had suffered no damage 
whatever from accident, and that they had lost not so much as 
wrench during the year's service. 

The Jacob Van Skiver Co. of Philadelphia have a bonus, 
or demerit system, for reducing maintenance cost on their fleet 
of trucks. They pay their drivers $30 a week if they keep the 
trucks on the road, but if for any reason a truck is kept in the 
garage, the driver is penalized $1, or has his pay reduced from $5 
to $4 per day until his truck is out again. He may be sent out on 
another truck if he is not needed to repair his own truck, but must 
stand the cut in salary just the same. 

Whereas the drivers in the past often found something the 
matter with their cars in bad weather to keep them in the garage, 
they changed their minds and decided that they would rather 
drive .outside than pay a dollar for the privilege of staying in. 

The Credit System for Economy. — The Chicago Motor Bus 
Co. uses its debit and credit system as a pooled bonus plan to 
increase gasoline mileage, in one month paying out $300 in 
increased salaries to secure a saving of $1,200 in gasoline, and in 
another case paying all the employes from a pooled monthly 
bonus for the reduction of accidents on a mileage basis. 

The Service Bonus (-S4). — Service bonuses can hardly be 
classified with production and economy, or combined bonus 
plans and credit systems, although they have a definite effect 
in reducing the labor turnover and in making drivers satisfied 
with their jobs. 

John Wanamaker has a simple bonus plan of giving the drivers 
$50 for every year of continuous service, and helpers $35 for a 
year of continuous service, in addition to the regular profit- 
sharing and welfare provisions made for all the employes of the 
Wanamaker organization. 

Strawbridge & Clothier of Philadelphia, another large retail 
store, has a yearly bonus plan for drivers and helpers. 

The Fair, Chicago, offers a 2 weeks' vacation with full pay 
after a full year's service, in addition to a Christmas bonus of 
$75 after 1 year's service, $40 after 6 months' service, and $25 
after 3 months' service. 

The Crane Co., as is well known, gives every employe a Christmas 
present of 10% of his yearly wages, which, at the customary wage 
of truck drivers, would amount to approximately $150 a year. 

This plan is criticized by many as being nothing more than 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 107 

a deferred salary payment, since the 10% bonus is counted on by 
all the employes when considering whether or not they will leave 
the company for higher immediate salary somewhere else. It 
certainly has nothing to do with the productivity of the faithful 
performance of scheduled duties by the employes individually. 

Yearly Bonus with Saving Feature. — The Walter J. Crow- 
der Co. of Philadelphia has met its labor problem by a sys- 
tematic campaign to cooperate with their drivers. They formed 
an employes' organization to promote good fellowship and 
interest in the company, and instituted a simple bonus plan. 

Each of the drivers pays 50 cts. a month in dues and the 
company puts 50 cts. with it for a Christmas saving fund; 
then, just before Christmas, each man receives a check for 
$12 from the company. 

Systematic Raise in Wages. — The Erie Service Co. of Buffalo 
finds that a scheduled raise in wages keeps the drivers satisfied 
and works out well for the company. 

They start a driver out at $20 a week, at the end of each 
month give him a raise of $1 per week until in 6 months' time 
his wage is $26 a week. In addition they pay 40 cts. an hour for 
overtime. The assured increase each month tends to keep the 
drivers satisfied until they are getting the maximum; from then 
on they stick to keep up that maximum income. 

Basis for Bonuses Must Vary with Conditions. — It is easy 
to vary the basis of the bonus plans to suit the conditions in any 
particular business. If a business, for instance, is delivering 
to a large number of customers on long routes, it would be 
foolish to try to pay a bonus on the ton-mile basis, because the 
ton-mileage in that case would be very difficult to obtain and not 
worth the trouble. Per package delivered and the tons delivered 
in the total trip, number of calls made, or some other such basis 
should be used in such a case. 

The Pooled Bonus. — Pooled bonuses have been very suc- 
cessful in certain factories where they have been tried, because 
as high as 700 operatives in a single department or plant can be 
placed upon a pooled or combined bonus that rewards every 
employe in the group for production records or economies of that 
group. 

During the war the Goodrich Tire & Rubber Co. had as 
high as 700 employes in the balloon department, sharing a 
pooled bonus on the following basis: Every piece of work pro- 



108 CONSTRUCTION COST KEEPING AND MANAGEMENT 

duced was credited to the bonus account at a pre-determined 
piece-rate price. The wages for the workers were deducted in 
total from this fund and the balance distributed among the 
workers, all 700 of them, in proportion to their wages. 

There are many cases where truck operators cannot in fairness 
accept a certain bonus standard and reward for their different 
drivers without working injustice upon the men who have the 
harder route or the more expensive runs for low production. 
The heavy and expensive run may be the run of lower production 
also through the exigencies of the business. 

In this case a pooled bonus is suggested that credits all the 
drivers in a pool with the earnings of the fleet as a whole over 
previous earnings or earnings agreed upon as standard and, after 
the wages are deducted, leaves a bonus fund to be divided among 
the men according to the wages earned. The men will see to it in 
this kind of an arrangement that no one of the men reduces the 
profits of the others in the group by his laziness or poor methods. 

The pool method has been used successfully by the Chicago 
Motor Bus Co. under the credit system, both in the machine 
repair shop and in the gasoline economy bonus. 

Similar results are shown by the Tiffany Studios in their 
no-accident bonus. 

While not having all the advantages of a bonus set upon 
individual records and paid to the drivers in proportion to 
their merit as in the Timken plan, the pooled bonus has other 
advantages not possessed by the individual bonus, because of 
the close supervision of the poorer workers by the better workers, 
which the individual system does not so much inspire. It is very 
much easier in many cases to install the pooled bonus. 

Objections to Production and Economy Bonuses. — H. H. Ball 
of the Molstedt Lumber & Coal Co., New Rochelle, N. Y., 
stated that his company put in a bonus plan some time ago based 
on the number of tons of coal that his driver could deliver. 

Not having a proper check or allowance for extra damage to 
the equipment, he found that it was only a short time before he 
had to take the extra help he saved in the production end, and 
put them in the repair department. He thinks that the result was 
just simply human nature on the part of the drivers, who got paid 
to produce without being penalized for causing extra repairing. 

Fixing Standards for Incentive Wage Plan. — Most incentive 
wage plans are based upon the time required to complete a job. 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PA YMENT 109 

The selection of the fair time, or as it is sometimes called the 
"standard time," required for an operation involves the making 
of time studies and careful analyses. Proper rest allowances 
are made and the logical time allowances for each sub-operation 
are determined. After these steps have been taken, it is always 
desirable to classify these figures into a table which may be 
readily used by a clerk in specifying the correct standard time 
allowance on current jobs. This problem of the proper classi- 
fication of basic standard time allowances is a real question with 
the industrial engineer and is worthy of special discussion. 
The method of procedure in such a contingency is explained by 
A. G. Bryant, Manager Betterment Department, Joseph T. 
Ryerson & Son, in the 100% Magazine, by means of the following 
simple example: 

In unloading lumber from a box car one or more boards at a 
time are drawn from the pile by a workman, dragged or skidded 
through the car door, to be piled on the outside by another man. 

We will consider only the handling of the common sizes of 
southern pine. Let us assume that time studies have been taken 
with a sufficient number of observations on various sizes of 
lumber. 

As a deduction from these time studies basic standard times 
have been selected for each individual size. The following are 
the sizes with the standard time required for each: 

1 in. X 4 in. X 16 ft. in.— 0.38 min. 
1 in. X 6 in. X 16 ft. in.— 0.40 min. 
1 in. X 8 in. X 16 ft. in.— 0.45 min. 
1 in. X 10 in. X 16 ft. in.— 0.47 min. 

1 in. X 12 in. X 16 ft. in.— 0.48 min. 

2 in. X 4 in. X 16 ft. in.— . 42 min. 
2 in. X 6 in. X 16 ft. in.— 0. 44 min. 
2 in. X 8 in. X 16 ft. in.— . 46 min. 
2 in. X 10 in. X 16 ft. in.— . 48 min. 
2 in. X 12 in. X 16 ft. in.— 0. 50 min. 

The next step is to consider what are the controlling factors, 
or in other words, the variables. 

The weight of the board, of course, affects the amount of energy 
required to handle it and accordingly varies the time. Likewise 
the relative limberness of the lumber is a controlling factor. 

When a thin board bends so that it is clumsy to handle it 
may require more time and energy than one which, though 
heavier, is stiff er. 



110 CONSTRUCTION COST KEEPING AND MANAGEMENT 



In order to determine the effect of these factors, the standard 
times are plotted on the accompanying chart (Fig. 1). Each 
cross represents the time required to handle one size of board 
as shown in the foregoing table. The points are located according 
to a horizontal scale representing the weight of the lumber and a 
vertical scale representing time in minutes. 



P 

3 
H 

z 

.60 — 



■SS 



48 



44 



UNLOAD! NO LUMBER FROM 
BOX CAT* 



TIME TOT? 1INCH BOARDS 



M- 

.3« 




s.0.0 46.0 6,0.0 &6.0 106.0 isdo 

•WEKS-HT QF BOARDS IN -pOUNDA 



Fig. 1. — Chart showing standard times of handling lumber. 

A solid line connects the crosses indicating 1-in. boards and a 
dash line represents the curve of the time for handling 2-in. planks. 

A cursory glance alone tells the story of the difficulty in 
handling thin lumber. It will be noticed that heavier mate- 
rial actually requires less time than lighter, flexible, lumber. 

It is not desirable to have a separate basic standard for each 
size of lumber and the question now arises as to the method to 
be followed in classifying. 

Although we have no intention of setting up an arbitrary rule, 
good practice would seem to indicate that the exact standard 
time as predetermined for any size should not vary more than 
arranged to cover it. 

Reviewing our chart, therefore, we see that points 1 and 2 
may be classed together but that point 3 cannot be thrown in 
with them as there is a difference between 2 and 3 of 0.05 minutes 
or 12.5 per cent. We perceive, however, that points 3, 4 and 5 
have a maximum difference of only 0.03 minutes or about 
7 per cent, and can be grouped together. 

Similar reasoning directs us to classify points 6, 7 and 8 
and 9 and 10. 



PIECE RATE, BONUS AND OTHER SYSTEMS OF PAYMENT 111 



We have therefore derived four classifications and by averaging 
the standards in each one, we secure the time to cover the group 
for practical application. 

Efficiency Wage Scale According to Engineering and Contract- 
ing, May 15, 1918. — A rating scale was adopted as the basis for 
wages at one of the large maintenance warehouses of the Los 
Angeles County Road Department at the time when a wage 
increase went into effect. 

Previous to the allowance of the increase, all common laborers 
were paid $2.50 per 8-hr. day, regardless of ability. This flat 
rate prevented promotion within this class and removed one of 
the best incentives for efficient effort. 

Many of the men had worked in the various paving, mainte- 
nance or bridge gangs under several foremen, so the value of each 
point in the percentage column was explained at a meeting of the 
foremen, and as the list of employes was read each foreman noted 
his value of the laborer. These figures were used to prepare a 
bulletin which fixed the rate of pay for the week following. 

An immediate improvement was noted and the men were also 
pleased with the fairness of the system and the prompt weeding 
out of the few drones. A sample bulletin, using fictitious names, 
•is given below: 

Efficiency Bulletin 

Under 70 % means dismissal. 
70 % and over, $2 . 50 per 8-hr. day. 
80 % and over, 2 . 75 per 8-hr. day. 
90 % and over, 3 . 00 per 8-hr. day. 



Name 



Week beginning Nov., 1917 



5th. 12th. 19th. 26th 



Aiken, Geo, L. . . 
Amlin, John L. . . 
Anderson, Ben. . 
Avery, Russell. . 
Beck, Frank A.. 
Brown, Clarence 
Bryant, Jesse R. 
Buell, Wm. N. . . 
Buford, Chas. C. 

*Discharged. 



85 
85 
80 

77 
72 
93 

85 
79 
82 



85 
87 
83 
72 
78 
93 
80 
80 
77 



87 
87 
83 
65 
80 
93 
80 
85 
68 



89 

87 

85 
* 

83 
95 

77 
83 



CHAPTER IV 
MEASURING THE OUTPUT OF WORKMEN 

Difficulties of Measurement.— Before men can be paid accord- 
ing to their performance it obviously is necessary to devise 
methods of measuring the number of units of work done, but it 
is not always so obvious what units to select nor how to measure 
them readily after the selection of units has been made. Indeed, 
this difficulty accounts in large part for the slowness with which 
piece rate and bonus systems have been adopted. 

Subdivision of Units into Other Units. — In engineering con- 
struction the cubic yard is a very common unit upon which 
contract prices are based, but the cubic yard itself is frequently 
a very uncertain unit of performance, for it is a composite of 
other units. Thus, in rock excavation there are several distinct 
operations involved, which may be enumerated as follows: 

1. Drilling. 

2. Charging and firing (or blasting). 

3. Breaking large chunks to suitable sizes. 

4. Loading into cars, carts, skips, or the like. 

5. Transporting. 

6. Dumping. 

The important item of drilling depends largely upon the 
spacing of the drill holes, which varies in different kinds of rock, 
and in different kinds of excavation, trenches and tunnels requir- 
ing close spacing. Clearly, then, the lineal foot of drill hole is a 
unit of work that must be adopted by the rock contractor in 
measuring the output of his drillers, and not the cubic yard. 

Transportation is largely a function of distance, hence the 
unit of transportation cost should be the ton (or yard) carried 
100 ft. or 1 mile, and not the cubic yard without the factor of 
distance. 

Our first rule to be applied in seeking units that truly express 
the amount of work done is as follows: Divide the contract 'price 
units into sub-units, selecting the "foot-pound" of work as the 
sub-unit wherever possible. 

A foot-pound is the unit of work used in theoretical and 
applied mechanics. It is the amount of work required to lift 1 

112 



MEASURING THE OUTPUT OF WORKMEN 113 

lb. a height of 1 ft. All forms of work are capable theoretic- 
ally of being expressed in foot-pounds, but it is often very 
difficult to do so in practice. For example, it is not an easy 
matter to ascertain how many foot-pounds of work a man per- 
forms in shoveling earth into a wagon, for there is not only the 
number of foot-pounds involved in lifting the earth but in pushing 
the shovel into the earth, in lifting the shovel, in lifting, the upper 
part of his own body, and in overcoming the inertia of earth, 
shovel and body. However, the theoretical ideal unit is the foot- 
pound, and, in selecting the actual unit to be used, the effort 
should be made to secure a unit that is as closely proportional 
to the foot-pound as possible. Thus, in drilling, there are certain 
units of work done by the drill in pulverizing the rock in the drill 
hole, and this work is quite closely represented by the number 
of lineal feet of drill hole in any given kind of rock. Hence the 
most practical unit of work in drilling is the foot of hole drilled. 

The second point to consider in selecting suitable units of 
work is the different processes involved. Each process on field 
contract work usually involves a different class of men. In rock 
excavation the six items above given usually involve six separate 
gangs of men. Although all contribute their part to the final 
contract unit upon which payment is received — the cubic yard — 
yet the work of each may be, and usually is, better measured 
in terms of some other unit. We already have seen that the lineal 
foot of drill hole — and not the cubic yard — is the unit to select 
for the drilling gang. The pound of explosive charged in the 
drill holes is a good unit by which to measure the work done by 
the blasting gang. The cubic yard of rock usually is the only 
practical unit of breaking large rock chunks. So, too, the cubic 
yard becomes the unit for loading and for dumping, whereas the 
yard-mile, or ton-mile, is made the unit of transportation. Still 
further subdivisions of some of these six processes are often 
desirable, yielding still other units that more closely approximate 
the foot-pound unit. 

Therefore, our second rule is as follows: Since construction 
usually is divided into processes, and since a separate gang usually 
performs each process, select sub-units based upon the work done 
by each gang. 

In order to apply this rule it frequently is necessary to reor- 
ganize the work so that each process is performed by its special 
gang. Where the work is not of sufficient magnitude to keep 



1 14 CONSTRUCTION COST KEEPING AND MANAGEMENT 

distinct gangs busy on each separate process, it is still often pos- 
sible it to work the same gang a few hours at one process and then 
shift to another process, instead of working the same men in 
a heterogeneous fashion on two or more processes at the same 
time. 

Units for Concrete Work. — The cost of a cubic yard of concrete 
may vary between about $6 for cheap pavement sub-base to 
about $30 or more, for certain parts of a reinforced concrete 
building. A hasty generalization drawn from such variations 
as this has led many an engineer to scout the usefulness of cost 
data, particularly such data as have not been gathered by the 
individual who attempts to draw conclusions from them. How- 
ever, when the cubic yard of concrete is divided into proper 
sub-units of cost, it is astonishing to note the fading away of 
all seeming difficulties, either in estimating costs of concrete 
or in securing data upon which to judge the efficiency of workmen. 

The labor processes in concrete may be classified as follows: 

1. Receiving and storing materials. 

2. Delivering materials to the mixer (loading and hauling). 

3. Mixing concrete. 

4. Transporting concrete. 

5. Placing concrete. 

6. Ramming concrete. 

7. Finishing the surface. 

8. Framing the lumber for forms. 

9. Erecting forms. 

10. Shifting and cleaning forms. 

11. Taking down forms. 

12. Shaping the reinforcing steel. 

13. Placing the reinforcing steel. 

Some of these processes may be still further subdivided, and 
frequently it is desirable to do so. While the cubic yard of -con- 
crete is usually a satisfactory unit for items one to six, it is clear 
that the square foot or square yard is a unit that must be used 
for item 7. Items 8 to 11 should be expressed in terms of the 
1,000 ft. B. M. as the unit, and it is usually desirable also to use 
the square foot of concrete surface covered by forms as another 
unit for estimating the cost of work on forms. Items 12 and 
13 should be expressed in terms of the pound of steel as the unit, 
since the number of pounds of steel per cubic yard of concrete 
varies widely. 



MEASURING THE OUTPUT OF WORKMEN 115 

Two or More Units for the Same Class of Work. — As just 
indicated, it is frequently desirable to use more than one unit 
of measurement. The unit on which the contract piece is based 
is usually a desirable one in which to express all items of cost. 
In addition to this, the cost of each item may be expressed in 
other units, such, for example, as the 1,000 ft. B. M. and the 
square foot of area for form work in concrete construction. Such 
units should be selected as will permit comparison not only of one 
day's work with another, but of one job with another, and fre- 
quently it is desirable to select units that may be used in com- 
paring two entirely different classes of work. 

Uniformity in Units of Measurement. — The economic im- 
portance of uniformity in units of measurement cannot be over- 
estimated. To illustrate: The common unit of concrete work 
is the cubic yard, but it is customary to measure cement walks in 
square feet. Now this leads to many blunders, not only in esti- 
mating the costs of walks but in effecting reductions in cost. Not 
only does the thickness of cement walks vary widely, but the 
proportion of cement to sand in each layer of the walk is variable. 
Therefore, to say that it takes so many barrels of cement to 
make 100 sq. ft. of walk means next to nothing unless the plans 
and specifications for the walk are also given. For purposes of 
accurate estimating it is necessary to prepare tables of cost of 
mortars and concretes in terms of the cubic yard; then by remem- 
bering that 100 sq. ft. having a thickness of 1 in. are almost 
exactly 0.3 cu. yd., it is a simple matter to convert costs per cubic 
yard into costs per square foot. 

Not only in computing costs of cement walks, and the like, 
but in reducing costs, does it aid us to use the cubic yard as the 
unit, for it enables us to make comparisons, and thereby dis- 
cover inefficiency of workers. In Gillette's "Handbook of Cost 
Data" a case is cited where the labor cost of the face mortar for 
a concrete wall was out of all proportion to what it should have 
been. Had the contractor estimated the cost of this mortar in 
cubic yards, he would have discovered that it was excessive. The 
labor of mixing mortar should not be much greater than the labor 
of mixing concrete per cubic yard, nor should the labor of con- 
veying the mortar in wheelbarrows be greater. The labor of 
placing it in a thin layer is obviously greater than for placing 
concrete in thick layers; but, in the case mentioned, the con- 
tractor was losing his money in mixing and conveying the mortar. 



116 CONSTRUCTION COST KEEPING AND MANAGEMENT 

He had not recognized the fact because he had not reduced the 
cost of dollars per cubic yard of mortar. 

In like manner, one may often see money wasted in making 
and delivering mortar to bricklayers and masons, because the 
cost of the mortar itself, in terms of the cubic yard of mortar 
(not of masonry), has not been calculated. 

The cost of labor on forms and falsework should always be 
recorded in terms of 1,000 ft. B. M., as the unit; for that is the 
common unit of timber work, and, being so, ready comparisons 
can be made only in dollars per thousand feet B. M. 

It is surprising how few managers of men have realized the 
value of reducing the cost of each item of work to units that are 
comparable ; and by this we mean units in terms of which entirely 
different classes of work may be compared. Thus, in a brick 
pavement there is grout used between the joints. This grout is 
a thin cement mortar, and it averages, let us say, 6 cts. per square 
foot of pavement. Now, what does it average per cubic yard of 
grout? Probably not one paving contractor in a thousand 
knows; but, until he does know, he cannot compare the cost of 
grouting with the cost of other kinds of cement work. Many a 
time have we had our eyes opened to unsuspected losses and 
inefficiencies only by reducing the costs of the elements of work 
to units comparable with the units of similar work in other 
fields. 

The ton is a very convenient unit to use when comparing 
the cost of loading and handling materials of all kinds. The 
ton of brick, the ton of gravel, the ton of timber, the ton of cast- 
iron pipe, are loaded upon wagons by hand at a cost differing not 
so much, one from the other, as might at first be supposed. 
When reliable data are not available for estimating the cost of 
handling any given material, by reducing it to tons an approxi- 
mate estimate can usually be made that will be satisfactory, at 
any rate far more reliable than a guess. 

Units of Transportation. — On contract work, distances of 
transportation are usually so short that the percentage of time 
"lost" by cars, carts, etc., while being loaded, becomes a very- 
large part of the total day's time. Hence the unit of transporta- 
tion must not be simply a unit of weight, or of volume, trans- 
ported a unit distance. For example, a wagon may be loaded 
with earth in 43^ min. transported 100 ft., dumped and re- 
turned in lyi min., or less; total, 6 min. Of this time less than 



MEASURING THE OUTPUT OF WORKMEN 117 

25% is spent in transporting the earth. On the other hand, 
if the haul is 6,000 ft., the time spent in transporting may be 
93%. The cost per 100 ft. transported is almost four times 
as much in one case as in the other. Therefore, unless the hauls 
are so long that the time lost in loading and unloading is an 
insignificant part of the total time, it is essential to divide the 
work of transportation into three elements: 

1. Time lost loading. 

2. Time lost transporting. 

3. Time lost unloading. 

Often this third item is so small that it may be disregarded. 
On contract work it is often necessary to have a fourth item: 

4. Time lost during the shifting of tracks, and other changes in 
plant location. 

In brief, the lost time, of whatsoever nature, must be deter- 
mined and deducted from the total time, before the number of 
units of transportation performance can be divided by the correct 
number of hours. 

Transportation, therefore, must be divided into two main units 
of cost: 

1. Non-productive (lost time loading, dumping, shifting 
plant, etc.). 

2. Productive. 

The total cost of the non-productive time is divided by the 
total number of yards or tons moved to get the unit non-produc- 
tive cost of transportation. 

The productive cost of transportation is the ton-mile, the 
cubic yard-mile, the ton-station (station = 100 ft.), or the like. 

The distance of transportation is usually computed from a 
map, but it is often desirable to attach an odometer to one, if not 
all, of the wagons, locomotives, or the like. 

Odometers of the kinds used on automobiles and bicycles 
can be advantageously used in a great many places on contract 
work, a few of which are as follows : On wagons, on wheel 
scrapers, on locomotives, on traction engines, on road rollers, on 
derricks (to record the number of swings), on hoisting engines, 
on cable way carriages, etc. Indeed, wherever a machine or tool 
has a revolving or reciprocating part, an odometer or counter 
can be used to record the number of reciprocations or revolu- 
tions, and from the data so recorded the amount of work can 
often be calculated with great accuracy. 



118 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Recording Single Units. — There are many classes of work in 
which the only practicable unit to be used is the single or individ- 
ual unit itself; thus, the telegraph pole erected, the pile driven, 
the door hung, etc. Obviously records of units of this sort are 
so readily made as to require almost no comment. 

A punch card is a convenient record of single units. Some 
contractors prefer a tally board on which each unit is marked or 
tallied with a pencil. Others use a board like a cribbage board, 
having holes in which plugs are put to record the number of 
units. Still others give out tickets to the men for each unit of 
work delivered. 

Record Cards Attached to Each Piece of Work. — In doing 
machine-shop work it is often necessary to have one piece of 
metal pass through the hands of several different workers. For 
example, one man may drill holes of a certain size, another man 
may drill holes of another size, still another man may thread the 
holes, and so on. In such a case it is common practice, where 
careful cost records are kept, to provide a card that is attached 
to each piece or each lot of pieces. In blanks provided on the 
card, each worker enters his number, and the number of hours 
and minutes spent by him in doing a specified kind of work on 
the piece. A modified form of this method is to attach a card or 
a brass check to each piece, giving a serial number and letter to 
the piece. Each workman on the piece notes its number on his 
own record card, and opposite this number he enters the amount 
of time spent on the piece. 

While this method of recording output cannot be as frequently 
used in engineering contract work as in machine shop work, 
it should not be overlooked by the general contractor. It 
might well be applied to timber work where one gang of men 
bores the holes, another gang saws and a third gang "daps" or 
adzes the sticks, and so on. It is desirable always to assign 
different kinds of work to different men, not only because the 
time usually lost in changing tools may be saved, but because 
men become more expert when they do one class of work only. 
The record card facilitates the differentiation of labor into 
classes, and is, therefore, a great aid in increasing the output of a 
given number of men. 

Measurements of Length. — For a great many kinds of con- 
tract work the lineal foot is the best unit to use. Track laying, 
fence building, pipe laying, setting curb, etc., come under this 



MEASURING THE OUTPUT OF WORKMEN 119 

head. Many other classes of work are commonly measured only 
in terms of the lineal foot, when, to permit true comparisons, 
some other unit or units should also be adopted. Sewer work, 
for example, is commonly recorded only in terms of the lineal 
foot; but the amount of excavation varies greatly per lineal foot 
in different sewers and often in the same sewer; hence the exca- 
vation should be measured with the cubic yard as the unit. 

Tunnel excavation should also be reduced to the cubic yard 
standard. A contractor has no very definite idea whether the 
"mucking" (loading of cars) in a tunnel is being done economic- 
ally or not until he has determined how many cubic yards each 
man is loading daily. 

Measurements of length are often best made by driving a 
line of stakes 100 ft. apart, calling each stake a "station." The 
starting point or station is called Station 0. The next station, 
100 ft. from the start, is Station 1; the next station, 200 ft. from 
the start, is Station 2; and so on. Hence the mark on any given 
station stake gives the number of hundreds of feet from the 
starting point. Points intermediate — that is, between any two 
stations — are called "pluses." Thus, a point 40 ft. in advance 
of Station 2 is called "two plus forty," and is written Station 
2 + 40, by which it is clear that it is 240 ft. from the start. 

Having driven a line of station stakes, properly marked with 
their station number, a foreman or timekeeper can quickly ascer- 
tain the station and plus at which the day's work has been 
completed. 

In many instances, measurements of length are best made by 
counting the number of pipe lengths laid, or the number of 
rail lengths. 

Measurements of Area. — Paving, painting, roofing, plaster- 
ing, and many other classes of construction work are best 
measured in terms of the square yard, square foot, or "square" 
(100 sq. ft.) as the unit. Since areas are usually measured with 
ease, it is noticeable that area work is generally done with much 
greater economy than mass work, which is usually more difficult 
to measure and consequently not measured every day on most 
jobs. It is sometimes not easy to measure the number of thou- 
sand feet board measure in concrete forms, in which case it may 
be preferable to measure the area of concrete covered by the 
forms, from which, if desired, the amount of lumber can be 
calculated approximately. 



120 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Measurements of Volume.— This class of measurements is 
usually the most difficult to make for purposes of daily output 
reports. Excavation, for example, is not easily measured, as a 
rule, except by a surveyor. Of massive masonry the same is 
true. Hence there are few contractors who know accurately 
how many cubic yards of this sort of work should be accredited 
each day to each gang. Record should be kept of the number of 
car or wagon loads of excavated material; but, to derive much 
benefit from such records, care must be taken to have cars and 
wagons of uniform size uniformly loaded, or to keep record of 
the capacities of the different vehicles. Where daily measure- 
ments of volume are difficult to secure, some one or more of the 
following methods may be adopted. 

Method of Estimating Excavation Yardage Daily. — W. A. 
Gillette devised a method of estimating earth yardage on 
grading jobs every day. The method consists in mounting, a 
timekeeper on a horse and having him ride from gang to gang 
all day long, stopping 20 to 30 min. at each gang. If a gang is 
excavating with fresno scrapers, for example, the timekeeper 
counts the number of fresno loads taken out by the gang in, say 
20 min.; and he records the count for that gang. The he rides 
on to the next gang which, let' us say, is loading earth by hand 
into wagons. This gang is timed for, say, 30 min., and the wagon 
loads are counted. 

In the course of the day each gang is thus visited and its 
output counted several times. If, for example, gang No. 1 
has been visited 3 times and during a total time of 1 hr. it has 
turned out 50 fresno loads, . it is then estimated that it would 
turn out 400 loads in 8 hr. 

An estimate is made of the average size of a load, and the total 
yardage output of gang No. 1 for that day is estimated. Simi- 
larly with the other grading gangs. At the end of the month the 
totals thus estimated are compared with a careful monthly 
estimate based on cross-sections. After a little experience it is 
possible thus to estimate within 5% of the actual yardage moved. 

Of course this intermittent count method can not be expected 
to give satisfactory results unless good judgment is used in its 
application. But it has been shown to the author's satisfaction 
that the method is sufficiently reliable when properly supervised. 
That it is simple, is self-evident. 



MEASURING THE OUTPUT OF WORKMEN 121 

The two greatest obstacles to the successful use of any cost 
keeping system are, first, a fairly accurate measurement of the 
number of payment units of work done each day, and second, a 
correct ascertainment of the total time lost or wasted by each 
gang. By "payment units" is meant the units of work for 
which a contract price is paid, as, the cubic yard of earth excava- 
tion, the square yard of pavement, etc. 

All costs should be finally reduced to so and so many cents or 
dollars per payment unit, so that the contractor can compare 
them with his contract prices. Fortunately the highway con- 
tractor has a relatively simple task in devising methods of measur- 
ing most of the payment units every day. Excavation measure- 
ments are the most difficult to secure daily, but a suggestion as 
to how this may be done has just been given. The yardage of 
pavement laid daily is readily ascertained. Since excavation 
and paving usually constitute the bulk of the cost of a road, 
it is evident that if a contractor can keep these two items 
of cost within his bid price, he can usually "win out" on the 
entire job. 

Measurements of Weight. — Loaded cars or wagons can be 
weighed on track scales or on portable platform scales, and this 
can be profitably done far oftener than it is. Loaded skips and 
buckets can be weighed with spring balances attached to the 
hoisting rope of a derrick. It is sometimes very difficult to 
measure volumes of certain quantities in the field and it then 
becomes of advantage to weigh them. It is not easy to tell how 
much rock there is on a skip load without weighing the loaded 
skip either by placing it on scales or by putting a spring balance 
on the derrick. Spring balances of that character can be pur- 
chased of a capacity up to 3,000 lb. and costing about $300. An- 
other form of rock measuring apparatus is in the nature of a 
balance, costing about $175. A great advantage of a spring 
balance on a derrick is that it takes no extra time for handling, 
and, while the first cost seems rather high, the information 
obtained on a large piece of work is well worth its cost. 

In a good many of the Hudson River Trap Rock Quarries 
the stone is handled in cars which are pushed along on the tracks 
for purposes of weighing and the men are paid for performance 
according to the weights on the cars. This is a very accurate 
and, where it is practicable, a highly satisfactory method of 
measuring output. 



122 CONSTRUCTION COST KEEPING AND MANAGEMENT 

This method has long been in use at coal mines where every 
car is numbered, and is weighed before dumping. 

On contract work, such as macadamizing, for example, each 
wagon load may be weighed, if the amount of the work warrants 
the purchase and use of platform scales. It is usually considered 
sufficiently exact, however, to measure the size of a few loads, 
and simply count the number of loads. However, loads often 
vary so greatly in size that this method of counting loads becomes 
very unsatisfactory. This holds true particularly of loads of 
quarried stone, of earth loaded by steam shovels, and the like. 
In such cases the contractor should seriously consider the advisa- 
bility of weighing each load. 

One of the most difficult classes of construction work to 
measure daily is rubble masonry. Yet we have found two very 
satisfactory methods of recording the work done by each derrick 
gang. One way is to use wooden skips that are loaded at the 
quarry with stone, put upon cars and transported to the work. 
Each skip is provided with a clip for holding a brass check. The 
checks are numbered serially, and the weight of stone correspond- 
ing to each number is entered in a book; for before delivery 
to the masonry derricks each skip is lifted by a derrick, placed 
on scales and weighed. It is sometimes preferable to provide a 
large spring balance for weighing, instead of using scales. The 
mason in charge of the derrick gang removes the brass check 
from the skip and keeps it, entering its number on a card which 
is turned over to the timepeeker at night, together with the brass 
checks. Thus it is possible quickly to ascertain the number of 
tons of rubble laid by each gang. 

Functional Units of Measure. — Under this head we class 
all measurements of units that are functions of the desired 
units. Thus, in any given mixture of concrete, the number of 
barrels or bags of cement is a function of (i.e., it bears a 
definite relation to) the number of cubic yards of concrete. 
Hence a record of the amount of cement used each day will 
enable making a close approximation to the number of cubic 
yards of concrete. 

In rubble or cyclopean masonry, a record of the number of 
buckets of mortar will enable making a close calculation of the 
yardage of masonry. If spalls are liberally used to reduce the 
amount of mortar, as they should be, then the number of buckets 
or skips of spalls should also be recorded. 



MEASURING THE OUTPUT OF WORKMEN 123 

The number of gallons of paint used is ordinarily a fair 
criterion of the area of surface painted. 

By the use of packets for handling bricks, Gilbreth has 
developed a system of measuring the work done by each brick- 
layer, for count is made of the empty packets stacked up by each 
mason. Since each packet is loaded with a definite number of 
bricks, this gives an accurate record of each man's output. 

Stockpile Measurements. — There are certain kinds of con- 
struction that are best measured indirectly by ascertaining what 
has been removed each day from the stock piles. Thus, in 
erecting a frame building, the different kinds and sizes of lumber 
can be piled in stock piles of regular size, easily measured. Rolls 
of paper, bundles of shingles, etc., can be stored in such manner 
that a daily inventory of stock on hand is readily made. By sub- 
tracting the amount shown by the inventory at the end of each 
day from the amount on hand the previous day, an accurate 
record is obtained of materials that have gone into the building. 
Since a carpenter's work is usually best measured in terms of the 
1,000 ft. B. M., the square of shingles, and the like, it is evident 
that stockpile measurements can be used to great advantage in 
determining the number of units of certain kinds of work per- 
formed on a building. 

The measuring of material is greatly facilitated by using a 
standard method of handling. Gilbreth's rule for cement (see 
his "Field System") is to place the bags one on top of the other 
in piles of 50. 

One of the most difficult of the materials to check regularly 
is the reinforcing steel for concrete. By furnishing a table to 
the storekeeper, that will give the weight per linear foot of the 
various sized bars, they may be wired into bundles approximating 
100 lb. each, this being a suitable amount for two men to carry. 
The bundles are, of course, nearly always more or less than 100 
lb., and when the steel is wired it is a good plan to attach to 
each bundle a tag giving its weight, which tag can be left with 
the storekeeper for record as the bundles are removed to the 
work. The difficulty of obtaining these records is caused by 
the fact that the material is usually placed in a haphazard way 
wherever it happens to be most convenient for the men placing 
it without any systematic regard for its use on the work. 

Key Units of Measure. — It is always desirable to relieve the 
foreman or timekeeper of the work of computing the number 



124 CONSTRUCTION COST KEEPING AND MANAGEMENT 

of units of work done daily, wherever such computation involves 
either many measurements or much labor in computing. A fore- 
man can readily report the number of "stations" of road graded 
or macadamized, leaving to the office force the work of deducing 
the number of units of work performed. 

A further step in the same direction is the use of key letters 
and numbers to designate sections of work whose dimensions 
the foreman may not know but which are recorded in the office, 
and from which the number of units of work performed can 
be readily ascertained. For convenience we call these units key 
units, since they are designated by key letters or numbers. 

Key Units on Drawings. — Any given structure can usually 
be divided into "sections" identical in shape and character of 
work. Thus, in a concrete building, there are a number of 
columns of identical size, a number of beams also identical, a 
number of identical floor slabs, and so on. To each of these 
"sections" a key letter or number, or a combination letter and 
number, may be assigned and written on the drawing. 

If numbers from 100 to 199 are reserved for "sections" on 
the first floor, and the letter C is used to denote columns, then 
C 100 will designate a particular kind of column on the first floor ; 
while C 200 will designate a corresponding column on the second 
floor. Having assigned keys to all "sections," the foreman or 
timekeeper is furnished with blueprints on which the "sections" 
with their respective keys are marked. In some instances it is 
preferable to furnish only a few large blueprints containing many 
"sections" on each print, but it is usually desirable to supplement 
these large blueprints with small ones of notebook size, which, if 
preferred, can be punched and bound in a loose-leaf binder. 

The foreman or timekeeper reports daily the number of each 
class of "sections" built by each gang, using the proper key to 
designate each "section." The office force, having computed the 
number of units of work in each section, is then able to record 
the total number of units of work done, with accuracy and with 
rapidity. If a full "section" is not completed, the foreman or 
timekeeper estimates the percentage completed, and reports 
accordingly. 

Keys Marked on Separate Members. — On certain classes 
of work a modification of the above plan is preferable. Instead 
of providing the foreman or timekeeper with drawings having 
keyed "sections," a key number or letter is painted, or otherwise 



MEASURING THE OUTPUT OF WORKMEN 125 

marked, on each separate member of the structure before it is 
put into place. Thus, each block of cut stone is measured in the 
stock yard and a "key " is painted upon it. Then, when the fore- 
man reports that block A 105 has been laid in the wall, the office 
force can determine its volume from the recorded measurements. 
The authors have found this to be the most satisfactory method 
of recording cut stone work, for it is thus possible not merely 
to tell the total amount laid each day by several derrick gangs 
but to tell precisely what each gang has done, for each boss 
mason can be required to record the key number of every stone 
laid under his direction. The office work of computing the 
volume of each stone is insignificant in amount if tables are used 
for computation, such as Nash's "Expeditious Measurer." 
These tables give the volume of any block, progressing in size by 
inches up to 4 ft. 9 in. by 6 ft. 4 in. by 1 ft. 1 in. The tables also 
give surface areas, progressing by inches, up to 4 ft. 1 in. by 8 ft. 
5 in. in size. 

Structural steel members can be marked with key letters; so, 
too, can heavy timbers, movable sections of forms and falsework, 
and many other classes of materials used in construction work. 

Conclusion. — Upon the ingenuity of the management en- 
gineer, who devises ways of recording the daily output of work 
done rests the success or failure of any effort to introduce modern 
methods of management on complicated contract work. The 
problem before him is often one to tax his ability almost to the 
elastic limit, for it is not sufficient to devise a method of meas- 
uring daily output after a fashion. He must devise not only an 
accurate method but one that permits of application at the hands 
of men comparatively unskilled mentally, and under the varying 
conditions that characterize field construction work. Many a 
contractor has given up in disgust his attempt to install a modern 
system of cost keeping, and has charged his failure to the folly 
of "new-fangled notions." Such failures are usually the outcome 
of trying to teach old dogs new tricks without so much as hiring 
a competent teacher. Eventually, it will be recognized that man- 
agement engineering is a science not to be picked up and mastered 
at one reading of any article or book, but that it requires study 
extending over a considerable period of time. 

Method of Reducing Idle Time. — The following notes are 
from Engineering and Contracting, Nov. 21, 1917. From time to 
time there is extended discussion of why contractors fail to make 



126 CONSTRUCTION COST KEEPING AND MANAGEMENT 

money. One sees discussions of the subject bearing on almost 
all phases of the matter, but rarely is there any question as to 
the competency of the men who hold the contracts. And, indeed, 
this is not a surprising thing, for contracting is an honorable and 
an honored business, and many who engage in it are among the 
leading men of the day. 

On the other hand, many small undertakings, especially in the 
line of public works, fall into the hands of men who are not 
possessed of great experience and who, no matter how well they 
intend to do, are nevertheless handicapped by this lack of experi- 
ence. This has occurred to the writer repeatedly as he has had 
occasion to visit small jobs and has had opportunity to observe 
the wonderfully low efficiency in handling men which many small 
jobs show, and it has often been a question in his mind as to 
whether the ordinary foreman knows how to find out even the 
most elemental facts as to how steadily his men are working. 

One very good way to do this is to find a place where one can 
watch a force of men at work without being too closely observed 
and then count the idle men, the count being repeated every 
minute over a period of 15 or 20 min. and repeated two or three 
times a day. Thus on a job in Iowa the following record was 
recently made : 

On the job: One foreman, one inspector, eight laborers, in 
sight. (There were two or three others on the job who could not 
be seen from the point where the counts were made.) 



Count 


Men 
idle 


Men 
at work 


Count 


Men 
idle 


Men 

at work 


2:31 


4 


4 


2:41 


5 


3 


2:32 


4 


4 


2:42 


7 


1 


2:33 


6 


2 


2:43 


7 


1 


2:34 


3 


5 


2:44 


4 


4 


2:35 


8 





2:45 


6 


2 


2:36 


5 


3 




— 


— 


2:37 


6 


2 




74 


46 


2:38 


4 


4 








2:39 


3 


5 


Average at work, 


3+. 


2:40 


2 


6 


Average idle, 5. 





The unescapable impression which this simple count gives is 
that more than half of the time of the men employed on this job 



MEASURING THE OUTPUT OF WORKMEN 127 

was being lost. If to this one adds the time of the foreman who 
in this case did nothing but "boss the job" the condition of 
affairs seems even worse. 

There is nothing new or original in this simple count to deter- 
mine the elementary question as to how much positively wasted 
time there is on a job, but if more contractors would adopt it 
there would be more of an effort to save labor by arrangements 
of the force which would eliminate the lost labor. 

On the job in question, a mixer was running at full speed during 
the whole period of the count. It had been running for some 
hours before the count was taken and ran on after the count was 
made. Three of the eight men fed sand and gravel to the mixer. 
The sand and gravel were not separate, but were mixed together, 
the aggregate being a run of pit material used without screening. 
One of these men was always idle. Two should have fed the 
mixer with ease even though it seemed that the aggregate had 
been unloaded farther from the mixer than was necessary or 
advisable. 

One man brought cement to the mixer. He was a dead ex- 
pense, and idle over half of the time. The cement could just as 
well have been unloaded on a platform where the man who tended 
to the mixer could have gotten at it without assistance. 

Another man pumped water for the mixer. A small power 
pump connected to the mixer engine should have handled this 
work. This man was idle two-thirds of the time. 

The man to tend the mixer was needed, but the man who 
dumped the mix and shoved it down a trough set at a light slope 
when it should have been set steep enough to permit the concrete 
to run or, better still, when the mixer should, as in this case, have 
dumped direct into the forms, was a dead loss. 

The man who tamped the concrete in the forms was needed, 
but he should also tended to dumping the batches as they were 
mixed. Thus, careful management would have cut this force of 
eight men to four men and it is not asserting too much to say that 
none of the four would have been overworked. 

Inquiry was made as to the financial side of this job. It had 
lost money! No wonder. Using two men to do one man's work 
is seldom profitable. 



CHAPTER V 

COST KEEPING 

Objects of Cost Keeping. — The two primary objects of cost 
keeping are: 

1. To enable a manager to analyze unit costs with a view 
to securing the minimum cost possible of attainment under 
existing conditions. 

2. To provide data upon which to base estimates of the 
probable cost of projected work. 

As a result of the analysis of unit costs, followed by a com- 
parison of the items with corresponding cost items of similar 
work previously done, a manager may discover; 

1. Excessive use of materials in erecting a given structure. 

2. Excessive use of supplies (coal, etc.) in operating a plant, 
whether due to ignorance, carelessness or theft. 

3. Inefficiency of workmen. 

4. Inefficiency of foremen. 
5 Padded payrolls. 

6. Excessive loss of time due to: (a) plant break-downs, 
(6) plant shifting, (c) waiting for materials or supplies, etc. 

7. Improper design of plant. 

Cost keeping also leads to the introduction of piece-rate or 
bonus systems of payment, which may, in fact, be said to be one 
of the ultimate objects of cost keeping. 

Cost keeping secures many incidental advantages, like the 
following : 

1. Fewer "bosses" are required on certain classes of work, 
for the report card is a more persuasive stimulus than the eye of a 
taskmaster. 

2. One skilled manager can direct many more men, and with 
much greater effectiveness than is possible where a cost keeping 
system does not exist. 

3. Systematic analysis of costs leads inevitably to a study 
of reasons for differences in costs, and this study of reasons is 
the first step toward inventing new machines and new methods 
for reducing costs. 

128 



COST KEEPING 129 

Cost Keeping Defined. — For the purpose of the discussions 
in this book, a distinction must be drawn between bookkeeping 
and cost keeping. 

Bookkeeping, as we treat it, is the process of recording com- 
mercial transactions for the purpose of showing debits and 
credits between different "accounts." These "accounts" may 
be individuals or firms, or they may be arbitrary accounts, the 
latter being an evolution in bookkeeping that came after indi- 
vidual accounts became so large or so complicated as to be 
insufficient to show the status of the business and the profits 
derived from any given transaction. 

Cost keeping, as we treat it, is the process of recording the 
number of units of work and the number of units of materials 
entering into the production of any given structure, or into the 
performance of any given operation. To these units of work 
or materials, actual or arbitrary wages or prices may or may 
not be assigned. The object of cost keeping is primarily to show 
the efficiency of performance ; hence actual money disbursements 
need not be recorded, as in bookkeeping. This distinction is 
vital, and will be discussed at greater length. 

Differences Between Cost Keeping and Bookkeeping. — 
Bookkeeping was first devised and subsequently developed by 
merchants. Cost keeping was devised and developed by engi- 
neers. The. merchant is a student of profits; the engineer is a 
student of costs. Although profits depend upon costs, there is a 
vast difference in the point of view of the merchant and the 
engineer. 

In the study of costs, as we have previously pointed out, 
the aim of the engineer is to reduce all costs to a unit basis, 
selecting such units as most closely conform to the theoretical unit 
of work — the foot-pound. This study often necessitates the 
use of several different units for the same class of work. It 
necessitates the recording of conditions, and the making of 
measurements — all of which is more or less foreign to the funda- 
mental idea of bookkeeping. Yet, in groping toward methods 
of cost keeping, it has become the practice of most contractors, 
manufacturers, railway companies, etc., to endeavor to develop 
a cost keeping system in the bookkeeping department. Hence 
we have today systems of bookkeeping that are wonderfully 
complex, and, withal, show very little that they attempt to show 
as to unit costs. 

9 



130 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Take, for example, the accounting department of an Amer- 
ican railway. Here we find skilled accountants loaded up with 
a mass of work called for in distributing the costs to different 
accounts. Calculating machines that carry the cost of railway 
spikes out to the third decimal place are clicking away from 
morning to night. A prodigious amount of figuring is done so 
that scores of distributions may be made, without the error of 
a cent in the balancing of accounts. Yet, with it all, what do 
these railway accounts show as to unit costs? Next to nothing 
worthy of the name of cost keeping. The authors have in their 
possession a mass of railway accounting records; some of it of 
great value, but most of it valuable only to show bookkeeping 
gone mad. The accounting department of the average railway 
has no true record of unit costs. The average railway engineer- 
ing department is even worse off, as shown by the ridiculous 
estimates often submitted. After a structure is built, the auditor 
of the railway takes the superintendent of construction to account 
for having exceeded the engineer's estimate. The engineer 
is put on the rack and calls the superintendent inefficient — 
which is usually true. The superintendent retorts, in his letter 
to the accounting department, that the engineer does not know 
how to estimate correctly — which, also, is usually true. Figures, 
figures, figures, but not a single unit cost! This is typical of 
railway accounting costs today. We emphasize it because it is 
also typical of the accounting departments of many contracting 
firms. And we emphasize it again because it illustrates so well 
our contention that bookkeeping and cost keeping must be 
divorced if there is to be a simple, effective system of ascertaining 
the efficiency of workmen, and permit of such study of their 
performance as will result in greater efficiency. 

Why Cost Keeping Records Should Be Kept Distinct from 
Bookkeeping Records. — Many contractors and engineers con- 
found cost keeping with bookkeeping and attempts are often 
made to make a cost keeping system so elaborate as to be a 
bookkeeping system, thus burdening the bookkeeping with a 
great deal of material that is not germane to it and piling the cost 
keeping under an avalanche of details and figures that are 
destructive to its economic value. 

Bookkeeping is an ancient art. Cost keeping is a develop- 
ment that is less than a generation old. Since cost keeping has 
resembled bookkeeping in some respects, it has been regarded as 



COST KEEPING 131 

an evolution of bookkeeping, when, in fact, it was not 
originated by accounts nor developed as a part of accounting. 
We repeat that cost keeping has been evolved and developed 
by engineers, not by bookkeepers. It is an art and a science 
having objects differing radically from the objects of book- 
keeping. Yet innumerable blunders have been made in the 
attempt to graft a cost keeping system upon a bookkeeping 
system. These blunders arise from a misconception of the 
functions of cost keeping and bookkeeping. Let us consider 
still further what bookkeeping is and wherein it differs from cost 
keeping. 

Bookkeeping in its original and simplest form consists of a 
record of debits and credits. Its primary object is to show 
obligations between individuals or corporations. By an exten- 
sion of this idea, arbitrary accounts were created, such as Bills 
Payable, Profit and Loss, etc.; but, in all cases, the accounts were 
kept in the form of debits and credits. Hence the general object 
of bookkeeping is to show debits and credits. 

Now, what is the object of cost keeping? Primarily, its object 
is to show unit costs. These unit costs may be used as standards 
by which to effect reductions in costs, or as standards by which 
to estimate the cost of future work. Cost keeping, therefore, 
involves the use of standards of comparison, which do not enter 
into bookkeeping in its original form, nor can the use of standards 
be grafted upon bookkeeping without great confusion and com- 
plication. As above stated, perhaps the best example of the 
confusion and complication that follow such an attempt may be 
found in the bookkeeping of railway companies. Without 
discussing the matter at this time, we need but refer to the 
absence of satisfactory unit costs in the accounting records of 
railways and the great labor involved in digging out the data 
necessary to derive unit costs of the kind most useful to the 
engineer. The labor wastes that undoubtedly occur in railway 
construction and operation are attributable to the hybrid system 
of accounting which is supposed to be good bookkeeping and 
good cost keeping, without being good in either respect. Nor 
shall we dwell upon the inability of the chief engineers of rail- 
ways to estimate costs accurately further than to point out that 
the accounting records are so involved as to be of little or no 
assistance to them. 

We shall now give in concise form some of the various reasons 



132 CONSTRUCTION COST KEEPING AND MANAGEMENT 

why cost keeping records should be kept entirely distinct from 
bookkeeping records. 

1. Since the primary object of bookkeeping is to show debits 
and credits, all accounts must be summarized in one book — the 
ledger. Since the primary object of cost keeping is to reduce 
costs, no book corresponding to a ledger is needed. Indeed it is 
often desirable to have cost records of different classes of work 
kept in different books, in different ways, by different men, in 
order to localize responsibility as well as to apply different units 
as standards of comparison. 

2. Cost keeping should partake of the nature of daily reports 
by which a superintendent can gage the daily performance, and 
discover inefficiency at once. Bookkeeping accounts may not 
be, and usually are not, posted promptly or completely until some 
time subsequent to any performance. 

3. Bookkeeping records must balance to a penny. Cost keeping 
records need not be kept with mathematical precision, except in 
so far as bonus payments to workmen are involved. The object 
of cost keeping is to show efficiency, and this may usually be shown 
by approximations fully as well as by hair splitting exactness. 
Hence cost keeping records may be devised that will require far 
less clerical work than is necessary when mathematically accurate 
bookkeeping is used. 

4. Bookkeeping is a clerical function; cost keeping is an engi- 
neering function. It is a rule of successful management not to 
ask one man to exercise many functions, particularly when 
they are diverse in nature. An engineer is not interested in 
recording debits and credits, or in the rendering of bills — func- 
tions of the bookkeeper. On the contrary, a bookkeeper knows 
nothing about construction methods and not only has little 
interest in construction costs, but lacks the necessary engineering 
training to interpret cost records and to devise methods of reduc- 
ing costs. 

5. A contractor who has an effective and simple system of 
bookkeeping naturally objects to a change to a more complex 
system, such as is necessary when cost keeping is added to the 
bookkeeper's duties. Gilbreth's "Office System" contains an 
admirable method of bookkeeping without books, which is kept 
wholly distinct from cost keeping. 

6. When cost keeping is begun, it is well to start in a small 
way, taking some particular kind of work, like teaming, and 



COST KEEPING 133 

applying a system of daily reports. When this phase of the work 
has been analyzed and organized, some other feature is taken 
up, and so on, thus developing a cost keeping system gradually. 
Resistance to change is bound to be encountered, and the way 
to overcome it is in this manner, a little at a time. Bookkeeping 
can not be changed a little at a time. A new system of book- 
keeping means an entire revision all at once, for accounts are 
interdependent. 

7. Cost keeping records should state conditions, such as 
weather, distance of haul, etc., which are essential to interpreta- 
tion of results. Sketches showing design of structures should 
form part of permanent cost records. Such things are entirely 
foreign to bookkeeping, and, if placed upon bookkeeping records, 
simply serve to confuse them. 

8. The bookkeeper enters bills for materials as they are 
received, crediting the firm that furnishes them. A barrel of 
spikes may be followed by a dozen picks on the bill. It is not 
the bookkeeper's function to trace the spikes to their place in the 
work, and, when the work is finished, to ascertain the total 
number of barrels of spikes used in a particular structure. That 
is the function of the cost keeper on the ground. The bookkeeper 
must show that John Smith Co. has been credited with the spikes. 
The cost keeper, on the other hand, cares nothing as to the par- 
ticular firm credited. He is concerned only with the quantity of 
spikes and the use to which they have been put. It is hopelessly 
confusing to try to show in one set of records both credits, and 
unit costs. 

9. In studying cost records to ascertain efficiency, it is often 
necessary to have several different units as standards. On 
reinforced concrete work, for example, the primary unit is the 
cubic yard, but there should be at least three other units, namely, 
the pound of steel (for comparing costs of handling and placing 
the steel reinforcement), the thousand feet B. M. (for comparing 
costs of forms), and the square foot of exposed surface (not only 
for comparing costs of form work but costs of surface dressing). 
Cost records must be sufficiently detailed for these purposes, if 
not in every case, at least in some cases of concrete work. Book- 
keeping records become hopeless of interpretation unless they 
are uniform, and, to be uniform, they must have few units of 
comparison. In brief, bookkeeping is not flexible. To gener- 
alize further, cost keeping costs must be divided by units of work 



134 CONSTRUCTION COST KEEPING AND MANAGEMENT 

done, so as to secure unit costs for comparison, which is a process 
foreign to bookkeeping. 

10. Since cost keeping has as its primary object the reduction 
of costs, since comparisons of results secured by different men 
or different machines or different methods are necessary, it follows 
that standard wages and standard prices of materials must be 
used. It may happen that on one job the cement may be 
purchased at different times at prices ranging from $2.20 to $2.50 
per barrel, and that common laborers may receive from $2.50 to 
$2.75 a day. In comparing unit costs a standard price of cement 
should be assumed, as $2.30 per barrel, and a common labor 
standard wage, as $2.50 per day. Then comparisons become 
possible. A bookkeeper cannot assume any rate of wage or any 
price; he must give the actual wage or price. A cost keeper 
usually finds it desirable to use' standard wages or prices which 
approximate, or actually are, the average. 

With the wide variation in wage rates as a result of the World 
War, it is considered more desirable to record labor costs on the 
man hour basis. 

With all cost records it is essential to record the size and type 
of equipment used and any special conditions tending to govern 
the output. 

Conversion Factors in Cost Keeping as an Aid to Management. 
There are many kinds of work involving a multiplicity of 
slightly varying conditions affecting the unit cost, and in such 
cases it may appear almost useless to ascertain the unit cost. 
Thus, in setting poles some of the cost variables are : Character 
of digging, topography, depth of hole, length and class of pole, 
number of poles involved in one job, obstructions such as trees 
or existing lines of wire, rate of wages, etc. In spite of all these 
variables it is possible so to determine unit costs of pole setting as 
to make rational comparisons of the costs on one job with those on 
another. This can most readily be accomplished by the use of 
what may be termed conversion factors. 

A conversion factor is the ratio of unit cost under an assumed 
standard condition to unit cost under a given condition that 
varies from the standard. Thus, the unit cost of digging a pole 
hole 5 ft. deep and 2 ft. in diameter in loam may be taken as a 
standard when wages are $2 a day when the men work steadily 
8 hr. a day at digging holes. Let the resultant average unit cost 
of digging be 50 cts- under these standard conditions. The first 



COST KEEPING 135 

and most obvious conversion factor is one that provides for 
lost time due to rain or other conditions beyond the control of the 
workmen, for which their pay is not "docked." If, for example, 
rain causes a loss of 1 hr. in the day, the resulting $2 wage becomes 
28.6 cts. per hour for the 7 hr., as compared with 25 cts. per hour 
for the standard 8 hr.; hence, the conversion factor for 1 hr. 
of lost time is 28.6 + 25 = 1.144 or 1.1/7. 

By timing the number of minutes required to dig the standard 
size hole in different kinds of soil, conversion factors for soil 
conditions are derived. Thus the conversion factor for clay of a 
given sort may be 1.3, for hardpan 2.5, and so on. 

In similar manner conversion factors for holes of different 
sizes and depths are derived by minute-hand timing. 

The number of holes involved in one job affects the cost per 
hole. If there are too few holes to keep the men busy throughout 
the day without the loss of time moving to another job, the time 
lost in moving increases the unit cost. Of course it would be 
possible to group this lost time with time lost because of bad 
weather, but it is not desirable to so do. Time lost due to 
conditions entirely beyond the control of the manager should not 
be merged with time lost under conditions that are more or less 
controllable. Altogether too much maintenance and construction 
work is done in small jobs far apart, and without adequate 
provision for rapidly moving the men from one job to another. 
The job-size conversion factor calls particular attention to 
large unit cost of small job work, and leads to study of means of 
reducing the time lost in moving and getting started. 

Rates of hourly wages differ in different localities and in the 
same locality at different times. Also where small gangs of 
men are moved about over considerable distances, it is frequently 
necessary either to increase their wage or to pay their board. 
Some gangs are not paid for holidays; other gangs are. These 
and similar causes affect the average hourly rate and make close 
comparisons of unit costs impossible unless wage rate conversion 
factors are used. 

It is rather astonishing how seldom this cost factor is given 
adequate consideration, particularly when it is so readily deter- 
minable. The explanation of remissness on the part of managers 
in this respect probably is found in their general attitude toward 
unit costs as criteria of efficiency. Confronted by many variables 
they are apt to make no attempt to study the effect even of the 



136 CONSTRUCTION COST KEEPING AND MANAGEMENT 

variables that are readily analyzed. Almost every variable 
can be rather easily taken into account by the conversion factor 
method, and none more easily than the wage variable. 

In the stringing of wire there are fewer variables of importance 
than in digging pole holes, yet even these few variables are rarely 
studied, and almost never used to establish conversion factors. 
Whether two wires or 12 are strung at one time makes an enor- 
mous difference in the cost of stringing per circuit mile. Still, a 
foreman often speaks with pride of his low unit labor costs of 
wire stringing, when the true credit for the low cost is assignable 
not to him but to the large number of circuits put up at the same 
time. Conversely, short wiring jobs of single circuits strung 
through trees show seemingly enormous unit costs for labor. 
By timing the added number of minutes involved in trimming 
each tree and the delay that it causes in wire stringing, tree-trim- 
ming conversion factors are derived, necessitating only on the 
part of the foreman or timekeeper the recording of the number of 
trees of a given class to a given number of poles. 

Each foreman should be provided with a table of conversion 
factors and a brief statement of the conditions and number of 
units that he is to record each day. The ordinary foreman should 
be required to do little or none of the calculation involved in 
making the extension where the conversion factors are applied. 
This should be done in the office with a slide rule. But each 
foreman should afterward be given daily, weekly or monthly 
statements of the unit labor costs, reduced by the conversion 
factors to the common or standard units. Rivalry among differ- 
ent foremen is aroused when periodic statements of unit costs 
under each foreman are sent out. Even under the existing 
methods of cost keeping where conversion factors are not used, 
desirable rivalry is secured by issuing unit cost statements. But 
the existing method falls far short of what is attainable in this 
respect by the use of conversion factors. Foremen know that 
conditions vary to such a degree that the ordinary unit costs 
(without reduction to a standard unit) are often meaningless. 

Time Keeping Defined. — Time keeping, in its old fashioned 
sense, is a part of the bookkeeping system, and the time keeper 
is charged with the task of ascertaining what time each man has 
worked during the day, week or month, according to the arrange- 
ment unber which he is employed, and what amount of money is 
due him on pay-day. The timekeeper was not concerned with 



COST KEEPING 137 

how much work a man did or on what process his time was 
spent, so long as the general distribution of the work was obtained. 
Of late years the timekeeper's distributions have become much 
more elaborate and now he is often charged with considerable 
cost keeping responsibility. When he does cost keeping work, 
the records should ordinarily be kept on separate blanks from 
the time keeping. 

If a time keeper, unaided, attempts to distribute the labor 
according to the work done, his records become complex and 
are rarely reliable, for, due to his going from place to place, he 
must rely upon what others (like foremen) tell him as to the 
performance of different men. In his attempt to balance the 
statements made to him with the total time, he usually " doctors " 
his distributed records. 

Hints for the Timekeeper. — The Iron Trade Review, Oct. 14, 
1915, discusses the importance of " personal touch," as a method 
of increasing the efficiency of employes, as follows: 

Every employer who has a real and heart-felt interest in all 
that is included in the three words "Safety, Sanitation and 
Welfare," wishes he could get into closer personal touch with his 
employes. Of course, if to him, safety, sanitation and welfare 
are merely empty words that cover a pharisaical pretense towards 
humanitarianism, or the chasing of fads and foibles, he has no 
interest in the personal touch and the employe is merely a 
machine with a capacity for so much output per day. 

But there are good grounds to hope that employers of this 
type are becoming scarcer than they used to be because the 
evidence is accumulating to prove that the efficiency of a man 
to a great extent depends upon the attitude of the man toward 
his job. There is no doubt whatever that the average man can 
make himself more efficient if he wants to. How to make him 
want to is the real question. He can increase his output, reduce 
the hazard, avoid waste, and promote the general welfare if he is 
so inclined, but, if not so inclined, he can be a source of loss and 
discontent and an all-round breeder of trouble. Which kind of a 
man he will be depends to a great extent on his attitude of mind 
toward his job. Employers who are animated by "enlightened 
self interest" know this and are open to suggestion as to how 
men may be brought into such a mental attitude toward their 
jobs as will increase and not decrease their efficiency. The 
purpose of this brief paper is to make such a suggestion. 



138 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Around a mine the employe who comes most frequently into 
personal contact with every man on the job is the timekeeper. 
It goes without saying that he should be honest and accurate, 
but honesty and accuracy are not the only qualifications he 
should possess, if he is to do all that can be done in his position 
to promote efficiency. Neill Hutchings, of the Tennessee Coal, 
Iron & Railroad Co., in a little pamphlet that is excellent reading, 
has emphasized the necessity of courtesy and a kindly way in 
contrast to the short, brusque, curt manner that, unfortunately, 
is affected by too many timekeepers. He insists that the most 
dense and ignorant foreigner is entitled to courteous treatment 
from the timekeeper, clerks and the paymaster. They are the 
custodians of the fruits of his labor. He is entitled to receive 
at their hands that degree of courtesy and consideration that is 
supposed to obtain between man and man. The very fact of his 
ignorance and stupidity should appeal to those who are more 
fortunate in their mental qualifications and should be reason 
enough for refraining from that brusqueness, not to say brutality, 
that sometimes is in evidence. It is not good business to 
antagonize men needlessly. It is good business to conciliate 
them and evince toward them a manly friendliness. 

Merely putting down the daily record of labor done should 
be but a small part of the timekeeper's usefulness. His job is one 
of personal touch; furthermore, he is not a boss. The superinten- 
dent is far removed. Whether he wants it or not, he is aloof from 
the men. The foreman, or shift boss, is to a degree the same. 
He wields authority. It is his business to direct, reprove and 
order. He must be extremely careful not to appear to play 
favorites. Here is where the possibility of the timekeeper's 
job comes in. Once or twice a day he meets each man face to 
face. If he made of the right stuff and animated by the right 
motives, he can be their friend. He can learn why Mike Mickilo- 
vich is not at work, and how matters are coming along in the fued 
that is brewing between the Austrians and the Serbians. If there 
are rumblings of a gathering storm, his ear can be to the ground. 
If the shift boss is a tyrant, he can know it. If the men have a 
real grievance, he can scent it far off. If some poor fellow is 
carrying a burden greater than he can bear, he can at least obtain 
a knowledge of the load. Presumably it is this sort of informa- 
tion the superintendent wants, if he is the kind of superintendent 
that knows that the personal touch is conducive to efficiency 



COST KEEPING 139 

But this does not imply that the timekeeper's job carries with 
it that of tale-bearer, or spy. It only implies that he should have 
human sympathy and full recognition of the rights of man; 
a sense of justice, and a desire to use the peculiar advantages 
of his position for the promotion of harmony, and for helping 
the superintendent with knowledge of the actual conditions as 
they obtain among the employes, without which the superin- 
tendent is lacking one of the factors which make toward his 
efficiency as a superintendent. 

There is no other subordinate job around a mine that covers so 
much territory; that takes in the underground workings and the 
office; that reaches from the top of the head frame to the pump 
station, like that of the timekeeper. A wide-awake timekeeper 
has a better all-around view of the operation of a mine than many 
a mining engineer. Because of the chances that the job lends 
toward learning the operating details, it should be sought after, 
providing the pay is at all adequate, by men who hope to advance 
in the business. Because of the peculiar possibilities the job 
presents for usefulness other than merely keeping the timebook, 
men should be sought after to fill it who can bring to it all those 
indefinable elements of courtesy, humanity, kindness, considera- 
tion and interest in the welfare of their fellow workers which go 
to further that much desired, if somewhat indeterminate, and 
called personal touch. There would appear to be evidence 
enough to show that in the selection of timekeepers these other 
qualifications have, in some cases, been sadly overlooked, much 
to the detriment of that ideal of harmony and team work which 
every superintendent is supposed to cherish. 

All of which is respectfully submitted for the consideration of 
superintendents when necessary to select timekeepers. 

Photographs as Records. — The value of photographs as records 
of construction work cannot be overestimated. If dated, when 
taken, photographs are not only useful in showing the progress of 
work, but also show in detail local conditions and the methods of 
carrying out the job. 

Photographs should be taken from two or more directions 
depending on the size of the work. They should be of a uniform 
size and preferably of dimensions to file properly with the cost 
records. However, if this is not possible, they may be of any size 
up to standard letter size (8^i by 11 in.) and filed in a special 



140 CONSTRUCTION COST KEEPING AND MANAGEMENT 

photograph file so that no delay will be experienced in getting at 
the information shown. 

It is desirable to use a camera fitted with as excellent a lens 
as may be procured, taking a picture of moderate size, say 3^ by 
4%. • With a camera of this description a greater number of 
pictures may be taken for a given expenditure than with a larger 
camera. If large prints are desired of certain negatives, enlarge- 
ments may be reasonably made which will be, depending upon 
the quality of the lens, equal in clearness and detail to pictures 
taken by a larger camera. 

Daily Cost Reports, By Whom Made. — Daily cost reports 
may be made by: (a) individual workmen, (6) foremen, or (c) w 
timekeepers, or by all three of these classes of employees. 

Individual workmen are not always competent to fill out 
reports properly, but if the report is simple in form and relates 
to work done by "skilled workmen," it is usually possible to get 
very satisfactory results. Certainly the individual report is to 
be encouraged wherever it can be applied for it heightens the 
individual's interest in his work. 

On field contract work the foreman is the man usually required 
to make the daily reports. His constant presence on the work 
enables him to make a more accurate report than a timekeeper 
can make, if the timekeeper is required to cover considerable 
territory, as is usually the case. 

In addition to his duty in keeping the time of the men for 
surposes of paying them properly, the timekeeper is often able 
to attend to filling out the daily cost reports, or one or more 
special timekeepers may be appointed for the special purpose of 
rendering daily cost reports. If the timekeeper is not able to be 
present constantly where a gang is at work, it is often wise to 
prepare certain blanks upon which he receives reports from the 
foreman of the gang, and, from these foreman reports and reports 
of individuals, combined with his own observations and 
measurements, the timekeeper is able to fill out the complete 
daily report. 

No hard and fast rule can be laid down as to the best persons 
to whom report making is to be entrusted. The character of 
the workmen, the size of the job, and other conditions govern 
the choice. 

Written Card vs. Punch Card Reports. — Daily cost reports 
are best made on forms or blanks, and these forms are preferably 



COST KEEPING 141 

cards in which the blank spaces are marked either in writing or 
by punching holes with a conductor's punch. The written card 
possesses the following advantages over the punch card: 

1. It is more flexible, because the punch card is limited in 
the scope of the record to what has been foreseen in the office 
plus what can be written in a small space reserved for remarks. 
The pad and pencil are not so limited. 

2. A man can usually go ahead filling out blanks in a written 
card without any previous directions, while he has to have some 
instruction in the use of the punch. 

3. Erasures are possible with pencil and pad but not with 
a punch card. This is not always an advantage on the side of 
the written card, however. 

The punch card possesses the following advantages over the 
written card: 

1. By folding the card, or by superimposing one card on 
another, a duplicate record is secured without the use of the 
carbon paper necessary to secure duplicates with written cards. 
This duplicate record cannot be altered or erased, and one copy 
may be kept by the superintendent for his record in discussing the 
work with the home office, the other being sent in as a regular 
report to the proper department. 

2. A dirty thumb can greatly interfere with the legibility of 
a written record. Moreover the average foreman or timekeeper 
does not write a particularly clear hand. Punch card records 
are absolutely clear and legible. 

3. It is sometimes expedient to have records from two or 
more men on the same card. By having no two punches alike on 
the job and having each man's punch charged to his name on the 
records it is possible to have a clear and complete record of who 
made the record without wasting time and space for signatures. 

4. The hole made by the punch is usually less than one- 
eighth of an inch in diameter, and consequently a much larger 
number of facts can be recorded upon a small card by the punch 
than by writing, the number of groups of facts, however, being 
somewhat limited. 

5. To punch a hole in a card takes much less time than to 
make the average pencil record especially where duplicated records 
are made. Where a timekeeper has to keep track of a large 
number of men this is a very valuable feature. 

6. A hole can be accurately punched while riding on a hand-car, 



142 CONSTRUCTION COST KEEPING AND MANAGEMENT 

wagon or locomotive, when the vibration would greatly distort 
a man's handwriting. 

7. Punch cards can be made on blue print paper from a tracing, 
which is an advantage where a mimeograph is not available for 
making white cards to be filled in with pencil. 

Time Cards That Show Changes of Occupation. — In field 
contract work there is usually more or less change of occupation 
constantly occurring. A gang of workmen may be engaged 
in grading for a while and then may be shifted to track laying; 
or at least some individual in the gang may be thus shifted from 
one class of work to another. Hence it is usually desirable to 
have daily report cards arranged so as to record the exact amount 
of time spent by each individual on each class of work. This 
may be accomplished in either one of two ways: First, by having 
a separate card for each workman; or, second, by having a gang 
card on which each workman's name or number appears, and so 
arranged that his time may be placed opposite or under the 
tabulated class of work that he has performed. 

The individual card (a card for each workman) is often pref- 
erable when the bonus system, or its equivalent, is employed. 
On most contract work, however, the bonus system is not yet 
in operation, and gang cards, filled in by the foreman, will serve 
the purpose of showing the total performance of the gang and 
the times spent by the various individuals on different work. 
There are several ways of recording the individual times spent 
by men working in a gang, among which the following are 
typical. 

Each employee is given a number, and the numbers are ar- 
ranged in a horizontal line across the top of a time sheet, as 
shown in Fig. 2. The different classes of work are printed in a 
column at the left, one line being assigned to each subclass. If 
team No. 1 works from 7 to 9 A.M. plowing, the record is made 
by the foreman, who writes 7-9 opposite "Plowing" and under 
No. 1; since this is 2 hours' work, the figure 2 is subsequently 
written directly below the 7-9. If team No. 1 is then transferred 
to work connected with rolling subgrade, and is thus engaged 
from 9 to 11 A.M., this fact is indicated, as shown, by writing 
9-11 under No. 1 and opposite "Rolling Subgrade." 

Another method involves the use of "key letters" to indicate 
each class of work, the proper key letter being placed opposite the 
employee's name and under the nearest half hour when he began 



COST KEEPING 



143 



doing the class of work represented by the key letter. Figure 3 
shows that employee No. 1, whose name is Smith, began work 
at 7 A.M., the key letter A being under 7, and that he was en- 
gaged in excavation, since A is the "key" for excavation. He 



SfrPPf 


'Date f Ort 








No. OF EMPLOYEE 


I 


2 


s 




GRADING 


Flowing 


7-9 

e 










Excavating 












Rolling BuDgrade 


2 








CONCRETE 
BASE 


Hauling ft Loading Concrete Gravel 


a-i'd 
1 










Hauling ft Loading Concrete Stone 












Hauling ft Loading Concrete Sand 












Laving Concrete 












Hauling ft Unloading Cement 










BRICK 


Hauling ft Unloading 


5 










Laying Brick 




i-b 
i 








Making Cushion 




4 








Hauling ft Loading Cushion Sand 












OuUlne Brier: 




1-3 

2 








Rolling Brick 










TILLER 


Putting Is Filler 




i-e> 

3 








Hauling ft Loading Filler Sand 












Putting In Expansion Joints 










SEWERAGE 


Putting In Sewers' ft Inlets 












Putting in Catch Basins 












Putting in Manholes 










SANE 


Screening Sand 










OURBDfG 


Hauling ft Loading Gravel or Stone 












Hauling ft Loading Sand 












Hauling and Unloading Cement 










SUNDRIES 


Hauling ft Loading filling Gravel 
or Sand 












Cleaning up 










General 








MACADAM 


Boiling Stone 










Spreading Stone 










Total Hours 


JO 


10 








Bate Per Hour 


15 


10 






All remarks 


must appear on the other side. 





r 




Ciln 


f 




l- 




m 


30 


31 


. 


33 


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Fig. 2. — Time card showing changes of occupation. 



continued on excavation until 10:30 A.M., when he began back 
filling, as shown by the key letter C entered under 10 and in the 
lower square. The upper squares indicate the even hour, and 
the lower squares indicate the half hour. At 3 P.M. he was 



144 CONSTRUCTION COST KEEPING AND MANAGEMENT 







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COST KEEPING 145 

transferred to concrete work, as shown by the key letter F 
under 3. 

A modification of this last method is shown on page 344 
where it will be seen that the number of hours worked by each 
man on each class of work is recorded under a column headed 
with a combination of key letters that indicate the class of 
work. 

On some classes of work, a gang of men is seldom split up, 
but the entire gang may be shifted from one class of work to 
another. A method of keeping a daily "log" of events, showing 
at the same time the number of units of work done, is illustrated 
on page 413. 

Wherever men are being frequently shifted from one class 
of work to another, some method of recording the time of shift- 
ing, at least to the nearest half hour, should be used, as outlined 
in the different ways above given. If a foreman does not make 
an immediate record of such shifting, but re ies upon his 
memory to fill in his report blanks at night, he is almost certain 
to make serious mistakes. Moreover, it is not unusual for a 
foreman to "doctor" the reports thus made, and even to falsify 
them grossly, for the purpose of showing a seemingly high 
efficiency of the men on certain classes of work; but, if a blank 
must be filled in during the progress of the work, and not at 
night, a foreman risks discovery of any attempted deceit, since 
his record card may be examined at an unexpected time of the 
day. 

Gang Report Cards. — These are usually made by the foreman 
in charge of the gang. If the gang is always engaged on the 
same class of work, it is not necessary for the foreman to keep 
a time record of each man's occupation, in the manner just 
described; for the foreman can fill in the daily report card from 
memory. In this case the timekeeper records each workman's 
name and hours of work, while the foreman concerns himself 
only with reporting the total number of men engaged on each 
class of work and their day's performance. 

A gang-report card should usually show most of the following 
things : 

1. Number of contract. 

2. Location of the job. 

3. Character of the job, 

10 



146 CONSTRUCTION COST KEEPING AND MANAGEMENT 

4. Date of the report. 

5. Kind of weather. 

6. Name of the foreman. 

7. Classification of work, or "key letters." 

8. Total hours' labor under each class. 

9. Rates per hour. 

10. Total pay. 

11. Number of units of each class of work done. 

12. Units of material and supplies used. 

13. Units of materials received. 

14. Units of material in stock. 

15. Delays, time and cause. 

16. Time machines are actually working. 

17. Kind of machine or tool used and its condition. 

18. Remarks. 

Obviously there are many classes of work that do not require 
a daily statement containing all these 18 facts; but in prepar- 
ing a daily report card it is desirable to have this list at hand, 
to make sure that no omissions occur. 

The space reserved for "Remarks" is usually so small that 
it is rarely used. Special conditions that would naturally be 
recorded under "Remarks" had better be recorded in a loose- 
leaf diary kept by the foreman, of which more will be said 
later. 

In designing a gang report card, the most difficult feature is the 
classification. This, however, is greatly simplified if done 
according to the following system: 

1. Select for the general class heads the items upon which 
the unit contract prices are based, such as excavation (cubic 
yards), macadam (square yards), curb (linear feet). 

2. Divide each of these pay items into the operations involved. 
Thus excavation involves (a) loosening, (6) loading, (c) trans- 
porting, and (d) dumping. 

3. Divide each operation into as many subheadings as there 
are classes of workmen engaged upon it. Thus, the operation 
of loosening earth may involve (a) teams plowing, and (b) men 
holding plow. 

Summing up we would have the following subclasses under 
the class Excavation : 



COST KEEPING 147 

Excavation — 

Loosening: Men holding plow. 

Teams plowing. 
Loading: Men shoveling. 
Transporting: Teams. 
Dumping: Men. 

The next thing to consider is whether the men are of the 
same class, receiving the same rates of wages; for, if they are 
not, there must be a further subdivision. For example, on 
cement curb construction, the classification would be as follows: 

Curb- 
Trenching: Laborers. 
Placing cinders: Laborers. 
Mixing and placing: Laborers. 
Setting forms: Skilled laborers. 
Finishing: Skilled finishers. 
Helpers. 

There are many kinds of pay items, such as macadam, that 
often involve processes that are performed at widely separated 
places. Thus, quarrying and crushing are processes far removed 
from spreading, rolling and sprinkling the macadam. When- 
ever this is the case, it is usually unwise to attempt to show all 
the processes on one report card. A good general rule to follow 
is to group together on the same report card only those processes 
that come directly and constantly under the eye of one foreman. 
Therefore one report card should show the quarrying and crush- 
ing, another should show the grading of the road; and possibly the 
spreading, rolling and sprinkling of the macadam should also 
be placed upon the same card with the grading, but not unless 
the grading gang is to be always a very short distance in advance 
of the macadamizing. 

The commonest mistake in designing report blanks is to 
endeavor to reduce the number of the blanks. It is far better to 
have more blanks and to distribute the work of reporting, for it 
not only simplifies the blanks, but, by giving each foreman less 
to report, greater accuracy is secured. In fact, there are many 
operations that can best be reported by the workmen themselves. 
Thus, to continue the illustration of the macadam road work, 



148 CONSTRUCTION COST KEEPING AND MANAGEMENT 

each of the teamsters hauling broken stone should carry an indi- 
vidual report card which is punched or marked by workmen at 
each end of the trip. 

We have said that the pay items should be analyzed accord- 
ing to the operation involved, but care must be taken not to 
select operations upon which men are engaged for but a few 
moments continuously. To illustrate: In mixing concrete by 
hand, there are usually the following operations — -(a) loading 
wheelbarrows, (b) wheeling, (c) mixing, (d) loading, (e) trans- 
porting, (/) spreading and ramming. Some gangs are so organ- 
ized that a few men are kept constantly busy loading wheel- 
barrows with sand and stone, while the rest of the gang spends 
a few minutes wheeling, a few more mixing, and so on. Clearly 
it would be foolish to subdivide the operations on the report 
cards where the organization is of this character, for most of 
the men are changing their operations so frequently that a 
foreman would have time for doing nothing but to record their 
changes. 

We see that the designer of a report blank should know approxi- 
mately what the organization of the gang and what the methods 
of operation are to be, before he can design a report blank that 
will be concise, and complete, but with no superfluous headings. 
Since there are almost innumerable methods of doing work, it is 
obviously impossible to furnish a set of printed report cards that 
will exactly serve all cases, unless the classification headings 
used are very general. However, the designing of a report card is 
a comparatively simple matter once the organization and 
methods of doing the work are known, provided the foregoing 
system is used. 

A tentative report blank can be designed either by using some 
existing report card for similar work as a guide, or by referring 
to some book that gives, in detail, the costs of construction work 
similar to that for which the report blank is intended. From 
the items of cost given in published records, a classification can 
be prepared that will be of decided help in planning the report 
card. 

In order to economize space on a report blank, it is not always 
necessary to print the classes or subclasses in full. Abbre- 
viations and key letters may be used. Sometimes the mere 
recording of the rate of wages opposite a class will show the 
subclass. Thus, under the class of "Forms" (building wooden 



COST KEEPING 149 

forms for concrete) if a wage of 40 cts. per hour appears, also 
a wage of 70 cts. per hour, it will be understood that the latter 
refers to the carpenter, while the former refers to the carpenter's 
helper. 

Having decided upon the classification of operations and 
employees, the next thing to determine is the character of the 
performance report, which is usually to be recorded on the 
same card. 

In Chapter IV we have discussed the difficulties of reporting 
daily performance, and have indicated ways of overcoming the 
difficulties. It is evident that a foreman or timekeeper should 
not be expected to report the number of units of each class of 
work performed if any considerable amount of difficult measure- 
ment is involved. Hence, it is usually futile to provide for a daily 
report of the number of cubic yards of earth excavated. On the 
other hand, the number of wagon loads, or car loads, may 
usually be reported, and the blank used for excavation should 
usually provide for such a report. 

If some of the excavated material is shoveled directly into the 
embankment or hauled by scrapers, while some is hauled by 
wagons, it will be futile to provide for a daily report of loads 
hauled. In such cases, it is often advisable to report merely the 
number of lineal feet of work done daily. Thus, in road work, 
where the excavation is shallow and mostly from ditches, the 
report should show the station and plus up to which the grading 
is completed at the end of the day. It is then the function of the 
office force to determine the yardage from the office records. 

The amount of concrete and cement work of all kinds can be 
reported with considerable accuracy by stating the number of 
bags of cement used during the day. 

Chapter IV should be consulted for further hints on methods 
of measuring daily performance of gangs. 

The amount of supplies, like coal, used each day, can usually 
be reported if some system be devised for recording consump- 
tion or for readily inventorying the stock on hand each night. 
It is generally wise to require coal to be measured in boxes or in 
wheelbarrows of uniform size, uniformly filled. Then each fire- 
man reports the number of cubic feet (or boxes) of coal used dur- 
ing the day. 

Empty dynamite boxes are often convenient for purposes of 
measurement, as they hold exactly % cu. ft. each. 



150 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Individual Record Cards. — Wherever individual workmen 
are paid by the bonus or piece rate systems, it is usually best to 
provide a separate record card for each workman, for it is difficult 
to make a compact record on one card that will show not only the 
occupations of a number of men, but the performance of each 
man. This is particularly true where the men are repeatedly 
shifted from one class of work to another. 

Where one man operates a machine, like a rock drill, it is 
usually wise to provide him with his own individual record card, 
upon which he is required to record his day's performance. A 
modification of this plan is to let the foreman carry the individual 
records of all the men, and fill in each card himself. 

The engineman on a dinky locomotive should be required to 
make and fill in a daily report, showing the number of train loads 
hauled, time lost, etc., as shown on page 301. 

A teamster should usually be required to carry a card whereon 
are recorded the times of arrival or departure at each end of each 
trip. 

A steam roller engineman should be required to fill in a card 
report showing number of lineal feet of road rolled, and the 
number of miles travelled by the roller. The latter should be 
recorded by an odometer. 

Kinds of Punches to Use. — If punch card reports are to be used, 
an ordinary conductor's punch will serve for small cards; but it 
is generally desirable to have large cards, which necessitates the 
use of a special punch having a 2-in. reach. Such special punches 
are made by L. A. Sayre & Co., of Newark, N. J., and by other 
railroad supply concerns. 

Size and Kind of Daily Report Cards. — It is usually desirable 
to have report cards of a size that will be suitable for filing in the 
standard card index files. A size that will be found satisfactory 
for general use is 5 by 7% in. 

If reports are to be written and made out in duplicate, the 
report cards should be made up in pads of alternate thin and 
thick cards, so that a carbon paper may be inserted between a 
thin card and a thick one. 

It is generally wise to have cards tinted one color for the 
original and another color for the duplicate. It is also a good 
plan to designate the kind of report card by a key letter, or com- 
bination of letters, which may be stamped in red in one corner 
of the card. Thus the letter T may be used to designate the 



COST KEEPING 151 

daily report card of teamsters. Instead of using mnemonic key- 
letters, some contractors prefer to use different tints for different 
classes of report cards. 

This works well when there are only a few classes, but becomes 
confusing when there are many, and is worthless as a means of 
distinguishing cards at a glance when there are very many classes. 

Where a great deal of information must be crowded on one 
card, it is often desirable to provide for writing the report on 
both faces of the card. This is objectionable, however, because 
it makes it impracticable to produce a duplicate by the use of 
carbon paper. It is also inconvenient to examine such a card 
after it is placed in a filing case. 

Foreman's Diary. — The foreman or the superintendent should 
always be required to keep a daily diary in which should be 
entered: 

1. Verbal orders received from engineers and owners. 

2. Verbal requests made to the engineers for grade stakes, etc. 

3. Weather conditions. 

4. Remarks as to hardness of digging, poor quality of materials 
and supplies, slowness of their delivery, general inefficiency of 
the men available, and such other conditions as bear upon the 
economic performance of the work but can not be shown in the 
daily report. 

The ordinary field foreman will not keep a diary of much 
value unless its pages are inspected daily. This requires that it 
shall be a duplicate loose leaf diary, the original leaf being sent 
to the office with the daily cost report, and the duplicate, or 
carbon copy, being retained by the foreman and bound in a loose 
leaf binder. 

Designing Punch Card Reports. — We have already enumerated 
the advantages of the punch card for certain kinds of daily 
reports. One of the earliest punch cards devised for this purpose 
is shown in Fig. 4, and was designed by one of the authors for 
recording the daily work done by each team in hauling broken 
stone for macadam. Each teamster carries a card which he 
presents for punching at each end of the trip. The diamond 
punch hole indicates that the loaded team left the crusher bin at 
7:05 A.M. The cross punch hole shows that it dumped its 
load on the road at 8:20 A.M. A new card is issued to each 
teamster each day; but, if it is desired to provide one card that 
will serve for a full week, one may be easily designed. 



152 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Figure 5 is such a team card of macadam road work. The 
punches on this card show: 

1. That the team was No. 14. 

2. That its pay was 35 cts. per hour. 

3. That the record is for the week ending July 12. 

4. That the team was hauling 2^-in. stone for macadam. 

5. That the haul was from Station 124 to Station 185. 

6. That the first trip on Monday was begun at 7:05 A.M. 
and that the team reached the place where the stone was dumped 
at 7:30 A.M. 



Team Day 


6 





5 


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Z5 


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Fig. 4. — Punch card, team. 



A more elaborate form of individual punch card is shown in 
Fig. 6 and is designed to show the daily performance of each 
rock drill in great detail. 

The punch holes in this particular card show : 

1. That the holes were spaced 4 ft. one way and 5 ft. the other. 

2. That + bits were used. 

3. That the drill was in good condition. 

4. That the drill was No. 2. 

5. That a 3 in. starting bit was used. 

6. That 54 ft. of hole were drilled. 

7. That there were 4 holes, Nos. 1, 2, 3 and 4, whose depths 
were 15, 14, 13 and 12 ft. respectively. 

(Note: A hole, No. 0, is provided, in case a partly drilled 
hole of the previous day has to be completed, for, in that event, 



COST KEEPING 



153 



the number of feet drilled to complete the hole is punched above 
hole No. 0.) 

7. That the date was July 16. 




02 JMyjQ MOUTMtlCM? 



V¥ 




Fig. 5. — Duplicate punch card, teaming (original size 5 X 7% in.). 



8. That work began at 7:02 A.M., and hole No. 1 was com- 
pleted at 9:44; that work was stopped at 12 A.M. and begun again 
at 1:00 P.M.; that hole No. 2 was finished at 1:18 P.M., hole 
No. 3 at 2:36, hole No. 4 at 4:52. 



154 CONSTRUCTION COST KEEPING AND MANAGEMENT 

It is not usually necessary to record rock drill operations to 
the nearest even minute, as the nearest 5 min. will ordinarily 
suffice; but it is sometimes desirable to have the drillers record 



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Fig. 6. — Duplicate punch card, drilling. 



the time of starting one hole and of starting the next hole. In 
that case this card, which provides for a time record on 2 min. 
intervals, is more satisfactory than one designed for 5 min. inter- 



COST KEEPING 



155 



vals. Drillers are often very slow in shifting drills from one hole 
to the next, which is well shown up if the time of finishing one 
hole and of starting the next is punched. Punching two holes in 
the card in one square (punching double), can be used to indi- 
cate time of starting a hole, while punching one hole indicates its 
time of completion. 

Note that in designing punch cards, space can be economized 
by the arrangement shown in the upper left hand corner of Fig. 6, 
where the upper line indicates "tens" and the lower line indicates 
"units." 



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C-4-. 



Fig. 7. — Punch card, blacksmith. 



The punch card lends itself well to recording the work done 
by individual men, or by one skilled man assisted by a few 
helpers, as exemplified in the blacksmith report card, Fig. 7. 
Here, it will be seen, the blacksmith punches the number of hours 
spent at each class of work. The nearest half hour is designated 
by punching on the line between the two full hours. By punching 
a blank card for every bit sharpened, the smith keeps tally of 
the number sharpened, and, at the end of the day, punches the 
number on this report card. 

On some classes of work, particularly shop work, it is often 
desirable to have a separate punch card for each class of work, 



156 CONSTRUCTION COST KEEPING AND MANAGEMENT 

instead of recording several classes of work on the same card. 
Figure 8 illustrates such a card that has been used by the National 
Switch & Signal Co. and was described by Mr. Chas. Hansel 
and published in the "Complete Cost Keeper," 1903. Each 
workman perforates the 5-min. time card for each job on which 
he is employed, simply piercing the card at the 5-min. points 
most nearly representing his times of beginning and ending 
work on the job in hand, the appropriate order number being 



TIME CARD 


Workman's No 


Date 


Date Commenced 


H 


Min. 


7 

8 


5 

5 


10 
10 


15 

15 


20 
20 


25 
25 


30 
30 


35 
35 


40 
40 


45 
45 


50 
50 


55 
55 


Order No 


9 
10 


5 
5 


10 
10 


15 
15 


20 
20 


25 
25 


30 
30 


35 
35 


40 
40 


45 
45 


50 
50 


55 
55 




Catalog No 


11 

12 

1 

2 


5 
5 
5 
5 


10 
10 
10 

10 


15 
15 

15 
15 


20 
20 
20 
20 


25 
25 
25 
25 


30 
30 
30 
30 


35 
35 
35 
35 


40 
40 
40 
40 


45 50 


55 
55 
55 
55 


Number Pieces 


45 

45 
45 


50 

50 
50 


Operation No 


3 

4 


5 
5 


10 
10 


15 
15 


20 
20 


25 
25 


30 
30 


35 
35 


40 
40 


45 
45 


50 
50 


55 
55 




Date Finished 


5 
6 


5 
5 


10 
10 


15 
15 


20 
20 


25 
25 


30 
30 


35 
35 


40 

40 


45 
45 


50 
50 


55 
55 


Approved 









Fig. 8. — Punch card, shop work. 



entered on the card by the foreman. When the workman enters 
the shop in the morning, he is furnished with one time card, 
which he hangs on the upper hook of his individual time board, 
after perforating it at his beginning time. If the foreman gives 
the workman a second job before the first is completed, he fills in 
the order number on a second card, and hangs this second card 
on the upper hook. Thus the workman may have any number 
of jobs before him, each order being given on a separate card. 
When any job is completed its card is transferred to the lower 
hook. The time cards on the lower hook are removed by the 
timekeeper each morning, cards on the upper hook being left 
undisturbed. 



COST KEEPING 



157 



Punch Card Showing Time and Occupation of Each Member 
of a Gang. — It is frequently desirable to record the amount of 
time spent by each member of a gang on each kind of work 
performed by him. Some ingenuity is required to design a 
punch card for this purpose, without making the card too large. 
Figure 9 shows a punch card (for a rock channeling gang) that 
provides for 17 men in a gang with 10 different occupations. 
The names or numbers of each of the men are written in the 
center of the card, with their rates of wages. All the rest of the 
data is punched. 



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Fig. 9. — Punch card, rock channeling. 



It will be noted that Wilson, Smith and Murphy each has 
one punch mark above his name, and to the left of the figure 9. 
This shows that each of them worked 8 hr.; but at what class 
of work? At the right of the figure 8 are three punch marks, 
under A, B and C, indicating channeler, helper and fireman. 
Which of these three men is the channeler? To find out, drop 
down to the lower half of the card, where the key letters A, B, C, 
etc., are found in a vertical column. Running the eye along the 
horizontal line from A to the left, we find a punch mark directly 
under Wilson's name, which shows that he is the channeler. In 
like manner, the punch mark under Smith's name, and to the 
left of B, shows that he is the helper. 



158 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The fourth man, Connors, has two punch marks over his 
name, one opposite 6, and one opposite 1. To the right of 6 we 
find a punch hole under D, which is in the column marked muck- 
ing; and, since there are no other punch holes opposite 6 and 
over the names of other men, it is clear that Connors spent 6 hr. 
mucking. But it is not so clear at first glance what the punch 
hole above Connor's name to the left of the 1 means, for we 
find two punch holes to the right of 1, through H and J, in- 
dicating work in connection with water supply and fuel supply. 
On which of these classes of work did Connors spend the 1 hr.? 
Dropping down to the vertical column of key letters, let the eye 
travel along the line to the left of H until it comes under 
Connors' name; there we find a punch hole indicating that he 
worked 1 hr. on water supply. But we see still another punch 
hole below Connors' name and to the left of J; hence he worked 
another hour on fuel supply. This makes the total of 8 hr. for 
Connors. 

The men whose numbers are 432, 447, 381 and 376 each 
worked 5 hr. at track laying; but man 432 has a second punch 
mark over his name, to the left of 1; we find what this 1 hr. of 
work was by looking for the punch marks below this man's 
number (432) ; for there we see that in addition to his having a 
punch mark to the left of E, which relates to his 5 hr. on track 
work, he has also a punch mark to the left of J, which relates to 
his 1 hr. spent on fuel supply work. 

This same scheme of indicating each man's work and the 
time spent upon it is susceptible of wide application, as will be 
seen by referring to the report cards in Chapters IX and X. 

In addition to the record of time spent by each man on the 
different classes of work, the card in Fig. 9 shows: 

1. That day was March 17. 

2. That 26 cu. ft. of coal were used by the channeling 
machine. 

3. That 2 pt. of oil and 1 lb. of waste were used. 

4. That the length of the first cut was 32 ft. and its depth 
36 in. 

5. That the length of the second cut was 22 ft. and the 
depth 18 in. 

6. That the area of the second cut was 96 sq. ft., and that of 
the second cut was 33 ft. 

7. That the total area was 129 sq. ft. 



COST KEEPING 159 

While the description of such punch cards sounds compli- 
cated, experience has demonstrated that any foreman or intelli- 
gent workman is easily taught how to use them. 

The important thing to impress upon the man who is to make 
out the report is that every workman must have at least one 
punch mark above his name and one below it, and that there 
must be a third punch mark on the line to the right of the upper 
punch mark and directly under the key letter which shows the 
nature of the work done, and that the punch mark below the 
man's name must be on the line to the left of the same key letter 
— the three punch marks showing the time spent and the kind of 
work. 

Duplicate Punch Cards. — It is often desirable to have a 
duplicate record of the daily report, one copy of which is sent 
to the office and the other retained by the man who makes the 
report. This is easily done with a punch card designed as shown 
in Fig. 10 so that, when folded along the center line, the duplicate 
half comes exactly below the original half. 

The maintenance of way card, Fig. 10 shows the number of 
men employed on the various classes of work indicated, the time 
spent on each, and the location of each class of work. The first 
column of figures indicates hundreds, second column tens, and 
third column units, so that 999 is the largest number that can be 
punched. 

The particular card illustrated gives the following informa- 
tion: 

The work consisted of renewing ties and surfacing track 
and was located between telegraph poles 121 and 990. There 
were 10 ties renewed and 260 ft. track surfaced, and 2 hr. were 
spent in traveling. There was a total of six men employed. 
All worked 1 hr. on D (renewing ties), all spent 2 hr. traveling, 
and all spent 7 hr. on F (surfacing track). Thus the work was 
distributed over D, F, K, as shown in the lower right hand corner, 
and all six men worked on each item. At this place is also shown 
the rates of pay. All the laborers received 14 cts. an hour and 
the foreman received $50 per month. The date was May 21, 
and the foreman's name was Applin. 

It will be noted that while the original card will show clearly 
the number of units of work done, etc., the duplicate, which is 
retained for an official copy and is not much used, must be read 
backward. 



160 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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Fig. 10. — Duplicate punch card, maintenance of way. 



COST KEEPING 161 

Record Cards Accompanying Each Piece of Work. — In 

doing machine shop work, it is often necessary to have one piece 
of metal pass through the hands of several workers. For ex- 
ample, one man may drill holes of a certain size, another may drill 
holes of another size, still another may thread the holes, and so 
on. In such a case a record card may be attached to, or accom- 
pany each piece or lot of pieces. In blanks provided on the 
card, each worker enters his number and the amount of time 
spent in doing a specified kind and amount of work on the piece. 

Using Several Record Cards, One for Each Piece of Work. — 
A method that is usually preferable to the one just described 
for shop work, is to give each workman several record cards. 
As each new piece of work comes to him, he enters its "order 
number" on a record card, and records the time he spends on 
the piece. When finished, he uses another record card for the 
next piece. Figure 8 shows a punch card designed for this 
sort of record. 

Store Keeper's Reports. — The store keeper's duties include 
the following: 

1. He must receipt for and take charge of all material delivered 
for temporary storage. 

2. He must see that all of this material is properly accounted 
for and none lost or stolen. 

3. He must take charge of the issuing of materials and supplies 
to the men and see that they are issued in proper quantity and 
that there is no waste. 

4. He' should see that needed material and supplies are 
issued without loss of time. 

To accomplish these objects it is necessary that some one 
be on hand at the store house at all times when material is likely 
to be delivered or called for. This includes the noon hour as well 
as other times. Considerable economy results from sending to 
the store house in the noon hour to obtain articles that are needed 
in the afternoon. 

The second duty of the store keeper is often interfered with 
by men going to the store house for articles needed in a hurry 
and not leaving receipts for them. The only way then that the 
store keeper can account for his materials would be by periodical 
inventories, and then at the best there is nothing whereby the 
periodical inventory can be checked. The perfunctory inventory 
is generally useless. All the men in the field in the position of 
li 



162 CONSTRUCTION COST KEEPING AND MANAGEMENT 

authority or who are likely to require to have materials issued to 
them should be provided with small requisition blanks similar to 
the one shown in Fig. 11, and the store keeper should require a 
requisition slip as a receipt for all material issued. 

At the end of the month these receipts for material issued 
should tally with his inventory and list of material received. 



Waterford, N. y. f . 



.190 



TO STORE KEEPER 

FORT ORANGE 60NSTRU6TI0N 60. 

Please Deliver to Bearer 



Charge. 



Fig. 11. — Requisition slip. 



On some work it is customary for the store keeper to go 
around the job interviewing the different men who may need 
material and take charge of getting the material to them, taking 
a receipt for material from the messenger. These receipts then 
form part of the record. Another way is for the foreman of each 
gang every night to turn in with his report a statement of the 
material that he will need and when. The requisition part of the 
report can then be abstracted and turned over to the store keeper. 
This: latter plan has the objection that, unless somebody works 



COST KEEPING 163 

over-time, it is difficult for the store keeper to get the material 
as early as it is likely to be wanted. The rule of requiring receipts 
for material should be applied even to such large units as piles 
and timber generally. Although it seems at first glance an easy 
matter to keep track of such large units without the application 
of any particular system, it is found exceedingly difficult in 
practice. 

After material and supplies have been issued by the store 
keeper they may remain upon the work for some time before 
being actually used. This applies particularly to such material 
as dynamite that is kept in magazines. The key of the magazine 
should be in charge of one man who should record the number 
of cases that he removes during the day. One of the best 
methods of getting this record is to have a card hanging by the 
magazine door and require the magazine tender to puneh a hole 
in the card for every case of powder that he moves. This 
card can then be turned in to the store keeper each day, from 
which the records of powder used and powder on hand can be 
kept posted. The same method works very well for recording 
cement. 

In general, when the material records are made by productive 
laborers in the field they should be made to the store keeper and 
be checked and handed out by him. 

When no definite rule is established for the prompt obtaining 
of material on request the inability to obtain material promptly 
is used as a most prolific excuse for not getting work done. 
In a certain case in point some important work was delayed for a 
long time because a pump gasket blew out just after the requisi- 
tion rule had been instituted on the work and before the store 
keeper realized the necessity of promptness in making deliveries 
or the directness of his responsibility. 

Reports on Materials and Supplies. — Figure 12 shows a 
requisition blank for materials, which is self explanatory. 

Figure 13 is a card for reporting supplies received. It includes 
the oil, waste, powder, caps and fuse supplied to the various 
field organizations, such as drillers, pumps, various steam shovels, 
dinkeys, cars, shovels, and also shows the amount remaining 
on hand. This is for steam shovel work in rock. 

Figure 14 is a material card designed to be used daily by the 
foreman on concrete work for recording the materials received. 
The size of various loads of cement, gravel, sand, screenings, 



164 CONSTRUCTION COST KEEPING AND MANAGEMENT 



MO 50 DANSYILLE AND MT. MORRIS R. R. material 

• *'" A. S. MURRAY. Jr.. RECEIVER 

REQUISITION ORDER DANSVILLE. N. Y., _ 19 

TO _ 



PLEASE FURNISH THE FOLLOWING MATERIALS 



DELIVER VIA. 



J D. L. & W. R. R. I 

( DELIVERY NOT ACCEPTED I 



APPROVED 



.GEN. SUHT. 



Fig. 12. — Requisition blank. 



SUPPLY EEPOET NO. 1. 190.... 




Drillers. 


Pumps. 


No. 1 
Shovel. 


No. 2 
Shovel. 


NO. 1 
Dinkey. 


No. 2 
Dinkey. 


No. 3 
Dinkey. 


Cars. 


Shop. 


Little 
Hill. 


On Hand. 


























































































































Dynamite. 
Exploders. 





















































































































Fig. 13. — Blank for reporting supplies received. 



COST KEEPING 



165 



stone, and the number of feet board measure of lumber are 
shown on one half of the card, and on the other half are the 
amounts of glass, steel, lampblack, oakum, nails, etc. On the 
back of the card an entry is supposed to be made of all material 
sent away from the shop or remaining on the work at night, thus 
giving a check upon the quantity of materials used. 



Job No. 


MATERL&1S RECEIVED 




Date 


190 


Foreman 


Size or Brand 


From Whom Received 


Size or Brand 


From Whom Received 


bbls. 


Cement 


bbls. 


Glass 


bags 


•• 


bars 


Steel 


Ids. 


Gravel 


» 


- 


- 


Band 


" 


- 


" 


Screenings 


" 


" 


lbs. 


Stone 


lbs. 


Lampblack 


- 


- 


« 


Oakum 


Ms. 


Sand 


m 


Rail* 


ft. 


lumber 







Fig. 14. — Blank for reporting materials received. 



Checking the Accuracy of Reports. — Systematic checking 
of the accuracy of reports made by individuals or foremen is of 
paramount importance, for, unless this is done, there is apt to be 
gross falsification of the reports in order to make a favorable 
showing of performance. Thus, if a drill runner is not checked 
occasionally as to his report of number of feet drilled, he is apt 
to add several feet to his actual performance. 

On one railway with which the authors are familiar, the master 
mechanic is in the habit of reporting the time of men spent in 
building new cars as if it were spent in repairing old cars. The 
object in doing this is to make a creditable showing of the cost of 
making new equipment. While it is true that this seems like 
robbing Peter to pay Paul, it must be remembered that there is 
usually great difficulty in determining just what is a reasonable 
cost of repairing a car, whereas there is no difficulty in fixing 
upon a reasonable cost of making a new car. 

So many men are dishonest, particularly in ways that are 



166 CONSTRUCTION COST KEEPING AND MANAGEMENT 

not actually criminal, that implicit trust should not be placed in 
reports that are not verified by systematic investigation at 
unexpected intervals of time, if they are not subject to constant 
checking. 

On construction work it should be the duty of some one to 
make reports that will check the reports made by individual 
workmen and by foremen. The time keeper is usually the man 
upon whom part of this checking devolves. Thus, the time 
keeper may be required to make certain measurements at the 
close of the day, from which a foreman's report of performance 
can be checked, as, for example, the number of drill holes and 
the depth of each. The timekeeper may also be required to 
visit each part of the work frequently, noting the number of 
men engaged in each class of work at the time of each visit. 
Frequent visits are often made possible by providing the time- 
keeper with a horse or a motorcycle. 

Checking the distribution of the men of a gang, as well as 
observing the energy with which they are working, may fre- 
quently be done to advantage by means of a telescope or field 
glasses in the hands of an observer located in a tower or on 
some high point of ground. 

By requiring different foremen and different individuals 
to report on the same performance, an excellent check can often 
be secured. Thus, a dinkey locomotive engineman should 
report the number of trains hauled, and either the dump fore- 
man or the steam shovel engineman should render a similar 
report. 

The monthly estimates of engineers should, of course, be 
used to check the daily reports of foremen, as far as possible; 
and on large jobs it is often desirable for a contractor to employ 
engineers to cross-section and measure the work once a week, 
if not more frequently. 

Where the gang under a foreman is frequently shifted from 
one class of work to another, the foreman should always record 
the time that the change is made, in one of the ways already 
indicated. When this is done, the superintendent or walking 
boss should examine the foreman's record occasionally, during 
the day — not necessarily every day — to assure himself that the 
foreman is posting the record properly and at the time each 
change is made. 

There should always be some system of recording the receipt 



COST KEEPING 167 

of daily reports at the office. This is sometimes effected by 
having a tabular list of all the reports that should be received, 
and by placing a check mark opposite the name of each report 
(or each foreman or individual making the report) under the 
day of the month to which the report relates. A glance at such 
a tabulation shows whether any report is missing. 

If it is the practice to plot or chart the returns shown by each 
report daily, then no further check may be needed to show that 
the report has been received. 

One of the advantages gained by divorcing cost keeping from 
bookkeeping is the check thus obtainable on both. The aggre- 
gate weekly pay roll shown by the timekeeper's report should 
check fairly well — not necessarily with great precision — with the 
aggregate pay roll deduced from the foreman's reports. Inci- 
dentally this check makes it more difficult for a timekeeper to 
"pad the pay roll:" that is, to enter fictitious names upon the 
pay roll or to credit a man with more time than he is entitled to. 
Many a contractor has been robbed in this manner. 

If the distribution of costs shown on the books corresponds 
with the distribution derived from the daily report cards, a fairly 
close check is obtainable. 

It is generally wise to have accounts for each of the main items 
of materials and supplies, such as lumber, cement, coal, explo- 
sives, etc. Then the total consumption of coal, for example, 
as deduced from the foremen's daily cost reports, should check 
fairly well with the amount purchased, as recorded by the book- 
keeper. Likewise the bookkeeper may divide the payroll into 
certain general classes of labor and assign an account for each class 
which should check with the cost records turned in by the fore- 
men. But, in our opinion, it is a serious mistake to encumber 
the bookkeeper with a multiplicity of accounts intended either 
to show detailed costs or to check the various details of cost 
deduced from the daily cost reports. 

Cost Charts. — For showing relative performance or relative 
unit costs, no method is so satisfactory as a diagram or chart. 
A glance at the unit cost line plotted on a chart shows the man- 
ager whether there is cause for congratulation or alarm. The 
up and down waves of a cost line are far more impressive than 
columns of figures ever are. 

A chart of daily performance has the incidental advantage of 
affording an automatic check as to whether all the daily cost 



168 CONSTRUCTION COST KEEPING AND MANAGEMENT 

reports have been turned in or not, for without the reports the 
lines on the chart can not be plotted. 

The chart shown in Fig. 15 was 8^ by 11 in. — a large enough 
size to show the unit costs with sufficient accuracy for compara- 
tive purposes. 

It will be noted that three lines are plotted on the chart. 
The upper line, drawn in full, marked A, shows the total daily 
yardage of rock loaded by two steam shovels. The line C shows 
the cost per cubic yard. The line B shows the total daily operat- 
ing expense, including only the pay roll and not the cost of fuel, 
dynamite and other supplies. 

The unit cost line, C, is the only one that presents any diffi- 
culty in plotting. On most contract work, some of the men are 
paid by the month, and their wages go on whether it rains or 
shines. The number of working days in the month (excluding 
Sundays and holidays) divided into the total monthly pay roll of 
these "steady pay" or "monthly pay" men gives the daily 
payroll of the "monthly pay" men, to which must be added the 
pay roll of the men who work by the hour or by the day. On days 
when the weather is so bad that no work at all is done, the daily 
pay roll of the "monthly pay" men would be divided by nothing, 
which gives an infinite unit cost, and therefore can not be plotted. 
But, if it is not plotted, and if there are several days in succession 
on which no work is done, the unit cost line ceases to show the true 
unit cost. This difficulty, however, is more imaginary than real, 
for the object of the chart of daily costs is not to show whether 
a profit is being made, but to show how well the work is being 
managed on those days when the weather is such as to permit 
any work to be done. 

In plotting a chart of costs, the performance can be plotted, on 
charting paper, each day in pencil and can be inked in at the end 
of the week, blueprinted and as many copies as desired sent to 
the home office. 

Referring to Fig. 15, we see that conditions of weather,acci- 
dents, etc., can be recorded on the chart. The full history of 
the work shown by this chart is as follows: 

The shovels did not work on the 1st or 2nd of the month, 
but one shovel started on the 3rd, making a record of 780 yd., 
which was the highest point that had been reached for several 
months. The cost of operation of both shovels was $240, making 
a unit cost for the output of one 38 cts. On the next day the 



COST KEEPING 



169 




•Fig. 15. — Efficiency chart, rock excavation. 



170 CONSTRUCTION COST KEEPING AND MANAGEMENT 

other shovel worked, but the total output of both was only 885 
yd., and, while the total cost rose to $285, the unit cost dropped 
to 31^ cts. On the 5th of the month, being Sunday, no work 
was done. On the 6th the work was badly interfered with, be- 
cause the water pipe, which supplied water to the work, was 
frozen, and the output of the shovels fell to 660 yd., while the 
total cost was raised slightly to $290, making a much higher unit 
cost of 43^ cts. On the 7th one shovel worked in a crippled 
condition for the whole day, while the other worked only a half 
day because of the short supply of water. The performance 
dropped still further to 580 yd., on account of the fact that one 
entire pit and dump crew was laid off for half a day, and the unit 
cost fell to 42 cts. On the 8th both shovels were held up for 
nearly half a day because of poor blasting in front of them and 
the necessity of drilling and blasting in the shovel pits. Because 
of the likelihood of starting at any time the crew could not be 
laid off, so the total expense was kept up to about $260, making 
the unit cost jump to 51}^ cts. On the 9th -both shovels were 
working in good shape and produced an output of 890 yd. with 
a complementary reduction in unit cost, since the total labor cost 
was increased but little. On the 10th the performance dropped 
slightly, but on the 11th it again rose, reaching 975 yd. The total 
labor cost for this day was higher than it had been any time dur- 
ing the month, while the unit cost was about 34^ cts. The 12th 
was Sunday and no work was done, and on the 13th but one 
shovel was working, as the other shovel was moving back in the 
cut. The high total labor cost maintained caused a very steep rise 
in the unit cost line. On the 14th one shovel was still moving back 
while the work of the other shovel was badly delayed because 
of trouble with poor coal both on the shovel and on the dinkey 
locomotives hauling dump trains. This difficulty was overcome 
to some extent on the 15th and 16th, but the output was still 
very low even for one shovel. On the 17th the second shovel 
cut in, but owing to a very shallow cut and frequent moves 
necessary, a very small output was obtained. The next day, 
however, both shovels were working well and got out 1,020 yd. 
The 19th was Sunday. On the 20th the output was maintained 
at rather a high figure, being 875 yd.; on the 21st the output 
dropped because of rain; 1 rose again on the 22d and went still 
1 Weather and some other conditions mentioned here are not shown, 
but are mentioned by way of explanation. 



COST KEEPING 171 

higher on the 23rd, reaching on that day 1,230 yd., which was the 
highest daily output of the month, and on that day the lowest 
unit cost is also shown. On the 24th the output fell because one 
shovel was delayed by having to wait for drilling, and on the 
25th only 230 yd. were taken out because neither shovel worked 
more than a few hours because the water supply was shut off by 
the freezing up of the pumping station. The 26th was Sunday 
and no work was done, but on the 27th the output jumped to a 
high point, reaching 1,180 yd., and the unit cost fell to 23% cts. 
The next day the output was 130 yd. less, but the total labor cost 
was also much less and the unit cost was maintained at 23^ 
cts. The performance fell a little lower on the 29th, but was 
still well above the average, but on the 30th fell to less than 100 
yd. because the weather was so extremely cold (minus 18°F.) 
that the men could not work. In this case the fixed charges of 
the shovel raised the unit cost of the 90 yd. taken out to about 
$1.50. When work was resumed on the 30th 875 yd. were re- 
moved at a cost of 30 cts. a yard. The jagged nature of the lines 
on this chart is due to the character of the weather. It will be 
noted that the general trend of the unit cost line was downward. 

The channeler chart, Fig. 16, shows only the performance and 
unit cost of the work done. This record is also for the 
month of January. Work began on the 2nd, the performance 
being but 160 ft. of channeling done by two crews. The per- 
formance fell from that point to 85 ft. on the 5th and rose to 
185 ft. on the 6th and again fell and remained low until the 
9th. These bad records were due to the presence of nigger heads 
in the rock being channeled which made fast work absolutely 
impossible. On the 9th the performance rose to 160 ft. and 
kept on increasing until the 11th, when 200 ft. was reached. 
On the 13th, 14th, 15th and 16th the performance was low be- 
cause of poor track. The track was fixed by the 17th, when 
performance again rose and was maintained at a figure slightly 
above the average until the 24th, when, because of the extreme 
cold one crew deserted its post and allowed the pipes feeding 
the machine to freeze. On the 29th the performance fell slightly, 
due to the clogging of the channeler by earth sliding into the 
cut, and the unit rose because it was necessary to put on an 
extra force to clean out this earth. On the 30th but little work 
was done owing to the extreme cold, but on the 31st the high 
record of the month was made, 370 ft. being channeled. 



172 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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COST KEEPING 173 

Progress Charts. — It is generally desirable to record graph- 
ically progress the of each particular class of work on a contract. 
This is best done by means of a progress chart similar to that 
shown in Fig. 17, which is a modified form of the chart shown on 
page 333. 

This chart relates to excavation. The first column is a 
percentage column. The second column gives the length of the 
excavation (trench, ditch, or the like). The third column gives 
the number of cubic yards. The fourth column gives the esti- 
mated cost. The fifth column gives the actual cost; a sixth 
column of actual cost is provided in case it overruns the esti- 
mated cost. The total length of the excavation to be done is 
775 ft., which is written opposite the 100%. Then the length 
column is divided into 7% parts, each representing 100 ft., or a 
"station." 

The total yardage in this length of 775 ft. is 1,600 cu. yd., 
which is also written opposite the 100%. Then this yardage 
column is divided into 16 parts, each representing 100 cu. yd. 
The work has been estimated to cost 50 cts. per cubic yard, there- 
fore the total cost of the 1,600 cu. yd. should be $800, which is 
written opposite the 100%; and the estimated cost column is 
divided into 8 parts, each representing $100. 

This work on section of excavation is scheduled to begin June 
3, as indicated in the space to the left of the percentage column 
and at the bottom; and it is scheduled to be finished in 3 weeks, 
as indicated. 

The work is begun on schedule time. June 3, as indicated 
by the entry to the right of the last column, and at the end of the 
first week (beginning of the next), June 10, the progress and 
cost are shown by the hatched portion below the heavy black 
line. It will be seen that the excavation has been completed to 
station 1 + 50 ( = 150 ft.), as shown in the second column; and 
that 350 cu. yd. have been excavated, as shown in the next 
column. The estimated cost of the 350 cu. yd. is $175, as shown 
in the fourth column. The actual cost has been proved to be the 
same as the estimated cost, or $175, as shown in the fifth column. 
The yardage completed up to June 10 is 22% of the total, as 
seen by comparing the first, or percentage, column with the third, 
or yardage, column; whereas, to have lived up to the estimated 
schedule, 33% of the yardage should have been excavated by 
June 10. 



174 CONSTRUCTION COST KEEPING AND MANAGEMENT 




Fig. 17. — Progress and cost chart, trench excavation. 



COST KEEPING 175 

The performance of the next week is similarly shown by the 
heavy black line opposite June 17, which shows that 375 ft. of 
length (reaching therefore to Station 3 + 75) and 900 cu. yd. 
have been completed. The total actual cost is now $400, as 
compared with an estimated cost of $450, showing that the 
work is being handled satisfactorily. 

If the chart is plotted on tracing cloth, blue prints are readily 
made. Instead of cross-hatching the performance area of each 
week, paints of different tints may be used. 

On jobs of long duration, a similar chart showing progress 
by months is usually desirable, in addition to a weekly progress 
chart. Then it is often desirable to paint the area on.the monthly 
progress chart, using the following colors of paints to designate 
the different months : 

January Chrome Yellow 

February Carmine 

March Payne's Gray 

April Deep Chrome 

May Prussian Blue 

June Burnt Sienna 

July Sepia 

August. Emerald Green 

September Cobalt Blue 

October Vermilion 

November Indian Red 

December Sap Green 

Charts of this sort should be prepared for each of the different 
classes of work, and, if the job is large, it should be divided into 
sections, each having its own progress chart. Finally, the 
manager should have a chart showing the progress of the job 
as a whole. To prepare such a chart, it is generally sufficient 
to reduce all the units of work done to the common unit of the 
dollar. To do this take the estimated costs, given in the fourth 
columns of all the weekly charts, and add them together. The 
sum will give the total amount of work done, based on the 
estimated unit prices. Then do the same with the actual cost 
columns. Plot these totals for the entire job, in columns side by 
side, as shown in Fig. 18. 

This summary chart, Fig. 18, shows that the estimated cost 
of the entire job was $20,000 (indicated by $20M opposite 100%). 
It shows that the work was scheduled to begin June 1, and to be 



176 CONSTRUCTION COST KEEPING AND MANAGEMENT 




Fiqt. 18. — Progress and cost chart. Entire job. 



COST KEEPING 177 

finished Oct. 31. As a matter of fact it was finished Oct. 10 and 
its actual cost was $21,000. 

On July 1, the total number of units of work done multiplied 
by their respective estimated unit costs amounted to $3,500, as 
shown in the second column; while the actual cost was $4,000. 

On August 1. the total work done, at estimated unit prices, 
was $7,000, and its actual cost was $6,800. Only 35% of the 
work was finished, although the time schedule calls for 40%. 

On September 1, however, the work is ahead of the scheduled 
time, and it also shows a greater cost than was estimated. 

A similar condition exists on October 1. 

The work is finished October 10, and since its actual cost over- 
runs the estimated cost, it is necessary to plot the actual cost in 
the fourth column, where it is seen that it amounts to $21,000. 

In preparing a time schedule, the first step is to take the time 
limit, as specified in the contract, and use this as the basis for 
planning the performance. A study of the plans and local 
conditions will determine what classes of work and what sections 
must be first started. Time schedules should be prepared for 
each of these, due allowance being made for the time required 
to deliver and install the plant, which is often an important con- 
sideration. If there is much plant to install, it is obvious that 
the intervals in the time schedule will not be evenly proportioned 
as in Fig. 18; but the schedule of performance for the first month 
or more will be much less than for succeeding months. 

Once a time schedule has been carefully prepared, every 
effort should be made to live up to it, not only in toto but in 
every section, in order to prevent disorganization of the work. 
The function of the progress chart is to show how well the plans 
are succeeding. 

History and Sketches of the Work. — As the work progresses, 
a brief — but not too brief — history should be kept of its progress, 
like the log of a ship. The organization of the forces, the 
number, kind and location of the machines should be recorded. 
Sketches should be made to show plant layout and local condi- 
tions. Sketches should also be made to show the types of con- 
struction. Large working drawings are usually too cumbersome 
to be of much value in any historical outline of the methods of 
construction. 

Finally, when the work is completed, a complete history 
should be written in as condensed form as is consistent with a 

12 



178 CONSTRUCTION COST KEEPING AND MANAGEMENT 

clear understanding of its governing features. This should be 
typed and bound in a loose-leaf binder, together with the sketches 
and photographs that illustrate it. 

Too much emphasis can not be laid upon the importance of 
such a written history, for memory, at best, is defective, and it 
often takes but a few years to render bare figures of cost almost 
worthless even to the man who gathered them. There is a 
further consideration — namely, that the employee who was most 
familiar with the work may resign or die, leaving the construc- 
tion company with a mass of data that would possess great 
value if accompanied by a full sketch of conditions encountered 
and methods used, but which are more or less useless without such 
a sketch of conditions and methods. 

Value of Progress Chart in Sinking and Concreting Deep 
Mine Shaft. — Richard L. Russell describes, in Engineering 
News-Record June 26, 1919, several novel details in under- 
ground construction developed and applied in the sinking and 
concreting of shaft No. 5 of the Miami Copper Co. at Miami, 
Ariz. This shaft has four compartments and is 936 ft. deep, 
and the concrete lining was carried on at the same time as, and 
without interference with, the sinking, 700 ft. of the shaft lining 
having been placed and two large stations having been excavated 
and concreted by the time the shaft had reached its final depth. 

The following notes in regard to the progress chart, used on 
this work, are taken from Mr. Russell's article. 

A chart was kept showing the progress made each day by 
each shift on each part of the work. A large-scale elevation of 
the whole shaft, stations, tunnels and ore pockets was made, and 
a certain portion was allotted to excavation, timbering, form 
work, reinforcing, concreting etc. To each shift boss was 
asigned a certain color, and the portion of the chart representing 
the location and the amount of work done was colored for the 
shift doing the work. The date was then written through the 
color. Quantities for this purpose were determined both by 
actual measurement and by the foremen's reports. For instance, 
the number of buckets of muck hoisted was a close check on the 
advance in sinking for that shift. The foremen were never 
formally notified that this chart was being kept, but within 2 
days from the time it was instituted they all seemed familiar 
with it and watched it closely. 

This chart not only furnished information as to progress at all 



COST KEEPING 179 

times and gave a comparison of the work accomplished by each 
shift, but it also served as a record which showed at a glance 
which shift boss had excavated any part of the work. If faulty 
workmanship had been discovered it would have been simple to 
trace it. 

Probably the greatest value of the chart, however, lay in the 
competition it aroused among the shift bosses, who realized 
that their work was being closely followed and that they were 
getting due credit. 

An Office System for Construction Work Covering Records 
of Plans, Progress and Cost and Bookkeeping Methods. — 
The following notes are taken from Engineering and Contracting, 
Dec. 17, 1913, by E. W. Robinson. 

The following is a general outline of an office system that has 
been worked up and tried, with more or less modification, on five 
reinforced concrete jobs varying in size from $20,000 to $115,000. 
The cost keeping and progress charts were taken, with very few 
changes, from a system worked out by another, but the rest of 
the system described herein was worked out by trial from a knowl- 
edge of the results desired, aided by suggestions obtained from 
reading many articles in the various engineering and contracting 
magazines and treatises. A description of a system of this kind 
is useful in that it may suggest to another a way by which he can 
meet his difficulties along this line, but the variations in the 
classes of work encountered and the personal equation of what 
results are desirable preclude one from adopting without modifi- 
cations the methods used successfully by another. Therefore 
this is offered in the hope that it will be an aid to some one who 
knows very well the results he desires to obtain but who through 
lack of practice in book and cost keeping, or for other reasons, 
is unable to secure them. 

Records of Progress of the Work. — A more or less permanent 
record of the progress of the work is desirable for many reasons. 
It may save many dollars in future disputes or law suits, as well 
as be a great benefit in working out an analysis of the cost data. 
This is obtained by means of diaries, notes on the timekeeper's 
daily reports and photographs taken at regular intervals. The 
photographs perhaps offer the best evidence to be used in a law 
suit, especially where they are filed with a third party as fast as 
taken. At present a complete set is taken, showing all parts of 



180 CONSTRUCTION COST KEEPING AND MANAGEMENT 



the job twice each month, with occasional sets taken in addition 
to show special features. The words "Progress Report," 
together with the name of the job, direction in which camera was 
pointed when exposure was made, and date are lettered on the 
file with Higgin's ink. By choosing a light place on the film or 
plate a very excellent title can be secured in this way. One of the 
reasons why photographs are so important is because they will 
show up many features that no one would think of entering in a 
diary for seeming unimportance, but which later may be of the 




Fig. 19. — Specimen progress elevation and profile of a bridge. 

greatest importance. The prints are trimmed to a uniform size 
and bound in a loose leaf binder in the order in which they were 
taken. 

The weather report of the U. S. Department of Agriculture is 
received each day from the nearest weather bureau and filed as a 
permanent record of the weather to supplement the records of 
the daily reports. On bridge work a water guage is set near each 
job and a record made and plotted on cross-section paper of each 
and every change in the water level of the river. All unusual 
rises in the river are shown on the progress profile which is 
described later. This shows at a glance the effect of the high 
water upon the progress of the work. 



COST KEEPING 181 

An accurate record of the amount, kind, location, etc., of the 
various items of work done each month is obtained at the time 
the monthly estimate is made up and is shown graphically on a 
profile and on the cost charts. In the case of bridge work a 
profile on the longitudinal center line of the structure is plotted 
to some convenient scale, and directly above this is drawn to 
the same scale an elevation of the completed structure in outline 
only (Fig. 19). Different kinds of cross-hatching are used to 
show the location of work done during different months, and the 
same convention for a certain month is used throughout on all 
charts. This profile shows the method used in prosecuting the 
work, and is valuable in connection with the cost data, as it 
explains many things regarding unusual unit costs for any par- 
ticular month. One must not expect it to be complete in every 
respect, for the reason that a drawing that would show every 
small detail would be so complicated as to lose its value as a 
picture which can be understood at a glance. On a concrete 
bridge this profile will show the progress of the excation, con- 
creting, piling driven, together with any unusual stages of the 
river as stated in the preceeding paragraph. 

The progress charts (Figs. 20 to 22) serve two purposes, to 
show the actual amounts of materials used and work completed 
and to give he costs of the same. The writer desires to state 
that methods here outlined for this feature were obtained from 
a series of articles by DeWitt V. Moore in "Municipal Engineer- 
ing" about 2 years ago. The only changes made were those 
necessary for the differences in the class of work under considera- 
tion at the time. As shown in the accompanying figures they 
consist of parallel vertical columns which are filled with the 
particular kind of cross-hatching for the month in which the work 
was done. About two-thirds the way up from the bottom a 
heavy horizontal line is drawn through the columns to represent 
the estimated quantities and costs, or 100%. This line also 
represents the time for completion as shown in the contract. 
Then if there is estimated to be 1,000 cu. yd. of concrete to be 
poured, and the total time for completing the job is 4 months, if 
at the end of the second month there are only 250 cu. yd. in 
place, the cross-hatching in the quantity column under the 
heading of "concrete" will be advanced from where it was the 
previous month to a point 25 % from the bottom line of the chart, 
while in the time column the same style of cross-hatching will be 



182 CONSTRUCTION COST KEEPING AND MANAGEMENT 




COST KEEPING 



183 




184 CONSTRUCTION COST KEEPING AND MANAGEMENT 

advanced to a point 50% from the bottom. This will show fox 
that particular item we are only 25% completed, when to finish 
according to schedule time we should be 50% completed. On 
a large job with many items of nearly equal importance it requires 




Fig. 22. — Chart giving summary of labor and material expenditure and plant 

cost. 



judgment to state the stage of the work from these charts, for 
the reason that when our time is 50% gone several items may be 
99% completed and others only 5% and the relative importance 
of the different items must be taken into account. The principal 



COST KEEPING 185 

value of the charts, however, is in showing the unit costs from 
month to month, and their variation according to quantities, 
locations, weather, etc. The same variation in regard to cost 
may exist as in regard to time. That is several items may run 
200% or even more above the estimated cost for that item, and 
yet the job as whole be completed below the estimate. If the 
unit costs as a whole are running close to the estimated costs, 
then the total actual cost column, when compared with the time 
column, shows a fairly accurate representation of the rate of 
progress. 

Three separate charts are made for each job. The first, Fig. 
20, is called the Labor Chart and contains only the items shown 
on the pay-roll sheets. While there are some labor items that 
never get on the pay-roll sheets, the reason this separation is 
made is because of the ease with which a check is kept on the 
costs. The timekeeper makes out a daily report showing the 
distribution of labor to each item listed on the chart. This is 
made to check the actual pay roll each week. One of these daily 
reports is shown in Fig. 23. It will be seen at a glance how easy 
it is for the timekeeper to keep an accurate record down to the 
nearest half hour for each man on each class of work. 

The unit costs for each month are written in small figures in 
the total cost column. These vary considerably from month to 
month, and would occasionally be cause for alarm were it not for 
the explanation given by the progress profile. For instance, one 
month the cost per square foot, or per cubic yard, too, for erecting 
forms for sub-structure was three times as high as it was the 
month previous. Turning to the progress profile we see that 
on this particular month the tops of four piers only were finished 
which had small yardage and superficial area, but were so cut up 
.with offsets, curved surfaces, coping, etc., as to be very costly 
as compared with the massive work of the month before. 

While the second chart (Fig. 21) is called the Material Chart 
it really shows all other items of expense not shown on the Labor 
Chart except that of plant or equipment. As shown, there are 
three items that are not material ; namely, general overhead ex- 
pense, office expense and cost of insurance and bond. All other 
items are material items and are taken directly from the books 
for that job. All hauling, loading and unloading, etc., of mate- 
rial is charged to material directly and not as a labor item. 
The unit costs of the different items on the Material Chart gives 



186 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the costs placed on the job ready to be incorporated into the 
completed structure. 

The third chart (Fig. 22) is merely a summary of the first two, 
together with the plant expense, chargeable to that job. The 
first cost, in the case of new equipment, and the invoiced value 
in the case of second-hand equipment, is charged directly to 
each job as it is placed on the work. Then the sale price, if 
sold, or the invoiced value if moved to another job, is given as a 
credit, leaving the balance as the depreciation or cost of plant 
for that job. 

Bookkeeping.— -The system of bookkeeping was the hardest 
proposition run against, and was finally solved by the aid of an 
expert in that line who was not convinced that there was only 
"one" system. A construction business is so much different 
from most any other business that to get up a suitable set of books 
for a contractor one must look at the problem from a different 
point of view than he would in the case he were dealing with a 
merchant. For that reason most of the bookkepeers consulted 
could offer no suggestions worth while, but the one who did offer 
much valuable information had had some experience in construc- 
tion work. Two books, loose leaf, are all that are needed to show 
in a convenient form every transaction. The first book might be 
called a book of "original entry" or "journal" so far as the pur- 
pose it serves is concerned. A copy of the page from this book is 
shown in Fig. 24. Every transaction that is to go into the ledger 
is entered into the ledger column. All items of cash receipt or 
expenditure are entered in the cash column. As all payments 
are made by check, this column, together with the check number 
column serve as a record of the checks issued and the balance at 
any time gives the cash standing at the bank or banks. The 
numbers in the check number column are checked off as the 
cancelled checks come back from the bank and here any errors 
between the original check and the stub from which the entry 
was made are picked up. After the cash columns are a number 
of blank columns which are to be lettered with the proper heads 
according to the charges to be made. Each full sheet has rulings 
for 26-charge items and where two or more jobs are being carried 
in the same book, or where for other reasons more detailed dis- 
tribution is desired, short sheets are inserted. These short 
sheets are just the right length to let the main columns show when 
it is turned to the left. This book measures 16 by 36 in. when 



COST KEEPING 



187 









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188 CONSTRUCTION COST KEEPING AND MANAGEMENT 

open, or 16 by 18 in. closed. Every fifth horizontal line is of a 
different color from the main ruling to serve as a guide line. 

The second book is an ordinary loose-leaf, stock ruling ledger 
such as is in general use for all purposes. All accounts that are 
not paid immediately upon the receipt of the goods are entered 
in the ledger from the ledger columns of the book of original 
entry. 

On all car load lots of material the invoice is entered and 
distributed to the proper charge column as soon as received. 
On other accounts, where there are a large number of small items, 
the entry is made and distributed when the statement for the 
whole month is received. For this reason the books are not 
closed until the tenth of each month. Individual accounts are 
carried in the ledger for all firms where the company is a regular 
customer. All other accounts that are not paid by the tenth of 
the month are entered as miscellaneous accounts payable. 
Delivery tickets are brought in from the job each month and 
checked against the invoices and statements. All invoices and 
statements are checked in regard to quantities, prices and exten- 
sions, and many dollars are saved in a year in this way that 
would be otherwise lost. It is a surprising fact that the monthly 
statement of some firms are invariably correct, while of others 
they are nearly always wrong in some particular. A memoran- 
dum is made of all special prices given orally by salesmen when 
orders are placed. 

Pay Roll and Pay System. — The timekeeper on each job keeps 
the time of the workmen in a weekly time book. All timekeepers, 
foremen and superintendents meet in the office on Friday of each 
week to discuss plans, etc., for the coming week and to work up 
the time for the week past. These time books then are turned 
in to the office man who checks them over thoroughly before 
making out the pay roll next day. All the men on the pay roll 
are paid in cash, and this makes it necessary to make up a list of 
the amounts of the different denominations of currency needed 
so that each envelope will contain as few pieces as possible. 
This causes considerable work, but not as much as that of 
writing checks, neither is it as costly as the latter. While there 
may be some disadvantages in paying off in cash, there are also 
several advantages. A piece of "real" money feels good to the 
average laborer, especially a negro, and other things being equal 
they will prefer to work for the man who pays in cash than one 



COST KEEPING 189 

who pays in checks. Then, too, this method prevents the 
possibility of having a check "raised." 

The office man copies the pay roll from each book on to a 
pay-roll sheet each week which gives a duplicate record for the 
office files to serve in case the field book is lost or destroyed. 
On these pay-roll sheets are listed the totals from which the 
liability insurance is based, making it an easy matter for 
the insurance company's auditor to go over and check the 
totals. 

Material Records. — A level or transit book is fitted up with 
the proper headings and placed on each job in which the material 
man keeps a record of all car load lots of material received and 
unloaded. Such information as car number and initial, dates set 
and unloaded, and by whom it was unloaded, together with any 
miscellaneous notes that are desirable is kept in this book. A 
daily record of the amount of cement used, with the member 
in which it was placed, is also kept in the material book. This 
book is brought to the office every Friday night and the items 
listed during the week are copied by the office man into a dupli- 
cate book kept in the office all the time. The headings in the 
office material book are the same as those in the first book, with 
additional ones to show weights, etc., and other information 
obtained from the expense bills and invoices only. The cost of 
keeping this record will more than pay for itself in the saving 
effected in demurrage bills, for most railroads are rather careless 
in their records of car demurrage when no one is keeping a close 
check on them. By system of checks between the invoices and 
•material books the amounts, dates received, etc., can be told at 
once for any particular material on each job. This record has 
several times saved the company from paying for a car of stone 
or sand that was billed and invoiced to them, but unloaded by 
mistake by other parties, and which might be easily missed when 
a large number of cars were being received and unloaded daily on 
the same switch. Where sand or stone is received on the job, in 
wagons from local pits and paid for by the cubic yard, the 
material man gives each teamster a printed ticket with his name, 
the date received, and the dimensions of his load, written, in the 
spaces provided, leaving a carbon copy of each ticket in the 
book for office use. Where the material man understands the 
use of the slide rule he figures by the cubic yards from the dimen- 
sions while the wagon is unloading and puts that on the ticket 



190 CONSTRUCTION COST KEEPING AND MANAGEMENT 

also. Otherwise this is done by the office man after the carbon 
copies are turned in to him each Friday night, and the man 
furnishing the material is paid from these carbon copies of the 
tickets issued. The dimensions are marked on the sides of the 
wagons with red kiel and show the length, width and depth of 
the box when level full. They are checked occasionally to see 
that false bottoms are not slipped in to lighten the loads, and 
when the load varies from level full the receiver estimates the 
number of tenths of a foot above or below the full line. 

Plans, Drawings, etc. — Before any forms are erected on the 
job the general scheme is worked out in the office. In most 
cases blue prints showing sketch, sizes and spacing of important 
members, together with the principal loads coming upon them, 
are made and sent to the superintendent on the job to be followed 
in the erection. However, in many cases the design is sketched 
to scale on this typewriter paper in pencil, and one of the two 
•carbon copies sent to the field. On these plans or sketches only 
the general layout or scheme is shown, together with the limit of 
sizes of the different members, the details being purposely left to 
the discretion of the superintendent, or carpenter foreman in 
case of form work. The reason for this is obvious, a good carpen- 
ter being generally able to work out a more economical detail 
than the man in the office. It is well to consult freely with the 
practical man on the job, for a great deal can often be saved in 
this way. 

All plans and sketches are filed in the office in such a manner 
as to be readily accessible. All sketches made on typewriter 
paper are punched and filed in a loose-leaf note book cover. All 
blue prints and large drawings are filed with the engineer's 
plans of the structure in a rack built for the purpose and which 
is so arranged as to hold each sheet fiat open and easy to get at 
without disturbing the rest. This method applies only to the 
drawings and prints for one particular job, for as soon as a job is 
finished all data for that job is filed in drawers together, as it is 
only seldom they are needed for reference. 

A Method of Determining Time of Performance of Work 
with Special Application to Grading. — The time factor in con- 
struction work is a variable which is dependent upon many 
conditions and is often of considerable importance. It appears 
that a practical method of approximating the number of work- 



COST KEEPING 191 

ing days to be allowed for a given contract is by carefully 
segregating, analyzing and averaging portions of similar work 
performed under approximately the same conditions. 

In a paper before the Society of Municipal Engineers of the 
City of New York, G. L. Bennett, efficiency engineer for the New 
York Board of Estimate and Apportionment, presented a general 
discussion of this subject with a detailed method of handling 
grading work, which is in use by R. H. Gillespie, chief engineer 
of sewers and highways for the Borough of Bronx, New York. 
While the methods and costs given apply directly to New York 
City conditions, the method of approaching the problem is 
applicable to any locality. 

Contracts commonly arise from demands which in themselves 
are either urgent and set for a particular time of fulfillment or are 
more complaisant as to time, requiring only ultimate completion 
within rather wide time limits. 

Contracts of the former type, for emergency, work or for 
supplying necessary links in larger schemes, can in porportion 
to their needs, afford to sacrifice economy for dispatch. Con- 
tracts of the latter type, which includes a majority of street 
improvement work, can properly afford to disregard time as 
such and to seek economy of total costs alone. 

Definition of Contractor's Economical Time. — There are com- 
paratively few pieces of work which can only be economically 
accomplished by the use of some one particular equipment and 
of some one particular method. In general, there are a number 
of equipments and methods which, depending upon the genius of 
those in control for management under the conditions obtained 
will yield economical results, but will require somewhat different 
times for completion. Leaving out of account variations in 
required time due to such causes there is for each sort of work 
some number of working days, more than which could not 
economically be used by the contractor. Thus, on a pick and 
shovel job, the employment of less than a certain number of 
men would not be economical because of the cost of the foreman 
and superintendence; similarly, the use of more than a certain 
number of working days by a contractor would be uneconomical. 
The same thing applies to any job for which an equipment and 
force are provided sufficient to complete that job in one of the 
perhaps several most economical ways so far as contractor's costs 



192 CONST R UCTION COST KEEPING AND MANAGEMENT 

are concerned; and to this somewhat varying time may be applied 
the term, "Contractor's Economical Time. " 

Equipment Warranted. — It is to be recognized that small 
total contract quantities, in general, only warrant the employ- 
ment of light and easily moved equipments and that as the 
quantities become larger more and still more effective equip- 
ments are warranted. 

But this may be modified considerably by the amount of work 
of this nature done or yet to be done, in the locality of the 
contract in question. Thus a rather small contract for rock 
excavation could properly be given a shorter contract time in the 
northern part of Greater New York where rock excavation is 
constantly in progress than it could somewhere out on the shores 
of Long Island or southern New Jersey. 

Relation of Labor Cost to Equipment. — The amount of equip- 
ment to be employed is seriously effected by the costs of 
labor and the ease of procuring equipment. Where satisfactory 
labor is expensive or difficult to procure, contractors will, in 
general, employ machinery of a type which otherwise would 
only be used on much larger contracts, resulting, of course, in a 
shorter contractor's economical time. Where machinery can be 
easily hired, equipment will often be used on small jobs such as 
could not otherwise be afforded. This affects also very large 
jobs for which, where no satisfactory disposal can be made of 
worn machinery, equipment is often provided only in such quanti- 
ties that it shall all be practically worn out when the job is 
completed. 

Definition of Total Cost. — The total cost of the work rather 
than the cost to the contractor is the matter which interests 
the engineer in his capacity of manager for the party contracting 
for the work. And the total cost is, of course, the contract price 
plus the costs of surveys and designs, plus the costs of inspec- 
tion, superintendence and interest on the moneys invested by 
partial payments or otherwise, all of which latter vary nearly 
directly with the time taken for the work. 

Two Methods of Determining Time. — Two methods of ascer- 
taining the time to be allowed were open: 

Method A. — By the balancing of inspection, superintendence, 
interest and similar time charges against the increased costs of 
obtaining and operating equipments of more capacity than are 
required to complete the contract in the contractor's economical 



COST KEEPING 



193 



time. That point on the curve which gives the least total cost, 
is the correct time to allow for the contract. 

Method B. — By plotting the times allowed on previously com- 
pleted contracts composed mainly of one kind of work and which 
had, in the judgment of the engineers in charge thereof, been 
prosecuted vigorously and with adequate equipment, a series of 
curves of quantity with reference to time can be drawn for each 
kind of work, each curve recognizing in its equation some par- 
ticular controlling factor of variation. Having such curves and 
knowing the total quantity of work to be done, the proper con- 
tract time can be ascertained and the results combined to give 
the time for a contract including various kinds of work. 



Cost Charges In Dollars 




— I 



Least Contractors Cost 
Least Total Cost 



Fig. 25. 



-Curves showing the relation of total cost to contractor's economical 
cost. 



Method A. — The operation of the first method for arriving at 
the contract time is shown diagrammatically in Fig. 25. 

In Fig. 25 the curve of contractor's costs shows the variation 
in cost with the contract time; the curve of interest, inspection 
and other time charges, the variation of these with contract 
time. The curve of total cost which has for its ordinate at each 
point the sum of the ordinates of the other two curves at that 
point, shows the variation of both with the contract time. 

The cost of interest, inspection, etc., will decrease therefore 
with a decrease in contract time, but because of the greater cost 
of equipment, etc., necessary to complete the work in less than 
a contractor's economical time, the contract price will tend to 

13 



194 CONSTRUCTION COST KEEPING AND MANAGEMENT 



increase. That time which will give the minimum total costs 
for the work which should accordingly on this sort of contract 
be used as the "contract time," will therefore be somewhat 
shorter than the "contractor's economical time. " 




SO 140 160 ISO £00 ££0 £40 £60 £80 300 3£0 340 360 3S0 400 
Working Days to be Allowed 

Fig. 26. — Curve for earth excavation. 



As these curves do not show variations with regard to quantity 
or other conditions governing any one sort of work, one such set 
of curves is necessary to determine the proper contract time for 
each total quantity of each kind of work. The contract times 




^ £0 40 60 SO 100 l£0 140 160 ISO £00 ££0 £40 £60 £80 300 3Z0 340 360 360 400 

j2 Working Pays to be Allowed 

Fig. 27. — Curve for rock excavation. 

can later be plotted against the total quantities as has been 
done for Method B, shown in Figs. 26, 27 and 28. 

It is to be noted that this method depends upon a curve of 
contractor's costs, which can be determined, point by point, for 



COST KEEPING 



195 



the total quantity and the kind of work to which this curve 
applies, only by designing the most efficient plant or equipment 
to do this amount of this kind of work in each of the varying 
times assumed and from the use and costs of these plants or 
equipments, arriving at the contractor's costs. 

There is a very considerable difference in judgment as to the 
most economical plant for any given contract time and total 
quantity of work to be done and still more difference as to the 
delays and other items summed up in the contractor's costs. 
This is apparent to those who are familiar with the variations in 
bid prices on works of such magnitude as call for new and specially 
designed equipments. 




30 60 SO ISO ISO ISO HO £40 £10 300 330 360- 390 4£0 ISO 480 

Working Days to be Allowed t.a c 

Fig. 28.— Curve for filling. 



And that the very considerable variation in bid prices between 
the various bids received for any contract is not all due to differ- 
ences in the profits which the different bidders desire, is quite 
clear to those who have studied prices bid when work was 
scarce and when, therefore, most if not all the bidders were 
competing keenly for the job. 

That there is ample room for considerable differences between 
even the most carefully estimated contractor's costs and the 
actual costs is quite evident to those who have planned and esti- 
mated and later built and operated contractor's plants. 

Method B. — In view of the large number of assumptions which 
must be made and the work involved the first method has been 
discarded in favor of the second. 



196 CONSTR UCTION COST KEEPING AND MANAGEMENT 



RULES FOR INTERPRETING CURVES USED IN METHOD B 

Determination of Contract Time. — To determine the number 
of days which shall be written into any contract for regulating 
and grading as the number of working days to be allowed, the 
curves hereto attached are to be used in accordance with the 
rules herein given. 

Explanation. — The work to be done will consist of items of 
rock or earth excavation or of filling or of both, of curb, of 
flagging, and of bridge-stones. These may or may not be ac- 
companied by walls of dry rubble, rubble in mortar or concrete; 
by pipe drains; by inlets; by receiving basins; by manholes; by 
piles; and by special constructions. 

Items Which Govern. — Ordinarily, work on more than one of 
these items can be prosecuted at the same time. Care is there- 
fore required to so use the information available of the special, 
conditions surrounding a proposed work as to eliminate from 
consideration all of those items and all parts of items which can 
properly be done during the progress of some other item. There 
will thus be left as the determining factor in the required time 
for such work one or, more rarely, two main items which can 
not be done simultaneously and some preliminary and subsequent 
parts of items. 

The main items are liable to be earth and rock excavation or 
filling. The preliminary parts of items: the excavation of 
sufficient earth to permit earth and rock excavation to progress 
simultaneously; the building of sufficient of the pipe drains, 
inlets, manholes or basins to permit such buildings and the filling 
to progress simultaneously or the building of sufficient walls, in 
those few cases where such wall is necessary before any filling 
can be done, to permit such wall building and filling to progress 
simultaneously. The subsequent parts of items: special struc- 
tures which can not be completed until after the main item is 
completed curb, flagging or bridgestone. 

The curves have been drawn to recognize, in view of the total 
quantity of an item to be done, the equipment and force which 
should be used. 

They show, accordingly each for its condition, the amount 
of time for any total quantity which should be consumed in 
completing that quantity. 



COST KEEPING 197 

Rule 1. — If the time for a part of an item has to be estimated, 
it is to be taken therefore at the same rate of accomplishment per 
day as is the total quantity. 

Rule 2. — Where conditions are clearly intermediate between 
those shown by the curves, interpolation is permissible, but 
where doubt exists it is preferable as making for lower costs to 
take that nearest diagrammed condition which gives the longer 
contract time. 

Rule 3. — Where a part of an item comes clearly under 
one condition recognized in the curves and the remainder 
as clearly under another, unless the equipment and force 
which should properly be used for doing these tw© parts is 
widely different, the time for the two parts, each taken at the 
same rate of accomplishment as if the total quantity came 
under that part's condition, shall be summed to give the time for 
that item. 

Rule 4. — If the equipment, etc., should properly be different, 
the time for each part of the item is to be taken as if the quantity 
for this part item were a total quantity and the times so obtained, 
summed to give the total time for the item. 

Note. — It is to be remembered that the contract provides 
that allowances of time for delays occasioned by the weather, or 
by any act or omission on the city's part, are to be made in 
addition to the number of working days. No consideration 
need be given in their determination to any conditions arising 
from such causes. 

The curves represent average good practice as determined 
from the records of many contracts. They do not represent the 
greatest progress which can be made under good management, 
and if, therefore, conditions arise not provided for in these curves, 
such as inability to attack the work in more than a few points, 
unless the condition is very severe, no additional working days 
are to be allowed as a total. 

Rule 5. — For time necessary to get the work started after 
being ordered ahead and for stopping, after completion, 10 
working days are to be allowed as a total. 

Typical Examples. — The following examples are given to 
illustrate the use of the curves. 

Example 1. — On a contract with a center line length of 8,900 ft. 
and a street width of 100 ft. there are the following items and 
quantities. 



198 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Earth excavation 88,000 cu. yd. 

Rock excavation 26,700 cu. yd. 

Fill . . . ■ 151,100 cu. yd. 

Dry rubble masonry 700 cu. yd. 

Rubble in mortar 25 cu. yd. 

12-in. pipe 100 lin. ft. 

18-in. pipe 575 lin. ft. 

Manholes 4 

Guard rail 5,800 lin. ft. 

Lumber 7,500 ft. (B. M.) 



Filling. — It is known that over a portion of the work where 
filling is required the street is located on a swamp where settle- 
ment will, in all probability take place. Assume that this 
settlement will amount to 30.000 cu. yd. Then the total filling 
required to complete the work would be 151,100 -f- 30,000 = 
181,100 cu. yd. 

The sum of the earth and rock excavation amounts to 114,700 
cu. yd. It should be assumed that the entire excavation is to be 
applied to making the fill so the material can be considered as 
easily available. 

The balance of the material required for filling (66,400 cu.yd) 
must be obtained from outside sources. It is further known that 
the swamp section of the street is near tide water where material 
can be obtained by scows. This material, so obtained, should 
be classed as material "easily available." Even though the 
dock or nearest obtainable landing may be at some distance from 
the street under consideration, and especially in view of the possi- 
bility of obtaining and placing this filling during the progress 
of the grading on other portions of the work, it should be classed 
as "easily available. " 

An examination of the filling diagram will therefore indicate 
that considering 181,000 cu. yd. as "easily available," 332 days 
should be allowed, and adding to this 10 days for starting and 
stopping, we have 342 days, or say 345 days for the contract 
time. 

Excavation. — If, on the other hand, we consider the excavation 
and know that the earth cutting averages from 4 to 6 ft. in depth, 
and the rock 4 to 8 ft. in depth, and that 10,000 cu. yd. of earth 
must be excavated before rock excavation can begin, and that 
thereafter both will be carried on simultaneously, we will obtain 
from the curves the following: 



COST KEEPING 199 

10,000 cu. yd. earth excavation (at 88,000 

rate) 27 days 

26,700 cu. yd. rock excavation 212 days 

239 days 
Starting and stopping 10 days 

249 days 

If we consider only the earth excavation, and assume that while 
same is in progress the rock will be excavated, we have from 
curves the following: 

88,000 cu. yd. earth excavation 235 days 

Starting and stopping 10 days 

Total time required 245 days 

It is evident from the above that the filling required on the 
work controls and that the contract time should be fixed at 345 
days. 
Example 2 — 

Earth excavation 1,000 cu. yd. 

Rock excavation 500 cu. yd. 

Filling 120,000 cu. yd. 

In this example the excavation is plainly not to be considered. 
The filling if easily available will by the curves require 268 days. 
If not easily available, filling will require 357 days. 

To either of these 10 days should be added for starting and 
stopping, making either 278 days which call 280 days, or 367 days 
which call 370 days. 
Example 3 — 

Earth excavation 6,000 cu. yd. 

Rock excavation 6,000 cu. yd. 

Filling 12,000 cu. yd. 

If earth overlays rock, the quantity of earth which must be 
removed to permit rock and earth excavation to progress simul- 
taneously, must be determined from a knowledge of the local 
conditions. If these conditions show that say, 35 % of the earth 
has to be removed before the rock excavation can be properly 
commenced, and that the rock has an average depth of 4 ft. or 
less, the times required for excavation will be : 



200 CONSTRUCTION COST KEEPING AND MANAGEMENT 

For earth 35% of the 64 days required by curve for hand labor 
for 6,000 yd. 

For rock 114 days required by curve for 6,000 yd. of average 
depth 4 ft. or less. 

The sum of these two, plus 10 days for starting and stopping 
equals 146 days which call 150 days. 

The filling, which is all easily available, would only require 90 
days. 

Therefore the contract time for this job would be 150 days.' 

If earth and rock are in separate cuts and separately approach- 
able so that the two sorts of excavation can properly progress 
simultaneously, the earth excavation need not be considered. 
The filling will, of course, not be the determining factor and the 
rock excavation will be. Under these conditions, the contract 
time should be for rock excavation, 114 days plus 10 days for 
starting and stopping equals 124 days, say 125 days. 
Example 4 — 

Earth excavation 20,000 cu. yd. 

Rock excavation 2,000 cu. yd. 

Filling ' . . 3,000 cu. yd. 

In this case, the earth overlies subgrade rock throughout most 
of the work. 

The rock excavation remaining to be finished after the earth 
excavation is completed will amount to about 18% of the total 
rock excavation. 

The filling will not determine the required time. 

The earth excavation being all in shallow cut will be taken out 
by hand labor, thus requiring 118 days. 

The 2,000 yd. of rock, 4 ft. cut or less, would require 36 days, 
and 18% of this would require 6 days. 

The sum of the above plus 10 days start and stop equals 134 
days which call 135 days. 
Example 5 — 

Earth excavation 1,000 cu. yd. 

Rock excavation 6,000 cu. yd. 

Filling 7,500 cu. yd.. 

Here, the 1,000 cu. yd. earth overlies the 6,000 cu. yd. rock 
and the conditions show that only a very little earth will be 



COST KEEPING 201 

taken off, say, 200 yd. before the rock is commenced. Two 
hundred yards earth should require about one-fifth of the 24 days 
required by hand labor curve for the total 1,000 yd., say 5 days. 

Six thousand cubic yards rock, of a 4-ft. or less depth of cut, 
requires by the curve 114 days. 

The sum of the above plus 10 days for start and stopping, 
equals 129 days which call 130 days, contract time. 
Example 6 — 

Earth excavation 30,000 cu. yd. 

Rock excavation 45,000 cu. yd. 

Filling (easily available) 120,000 cu. yd. 

The filling will require by the curve 268 days. 

The earth and rock excavation are such that they can be prose- 
cuted quite simultaneously. The rock excavation will therefor 
control and has an average depth of 6 ft., requiring by the curve 
270 days, so that 270 days is good for either. 

Therefore 270 plus 10 days stop and start gives 280 days as 
the contract time. 

The application of this method to others of the more usual 
types of municipal work is obvious and in some cases is under 
way. 

The confidence of contractors in general in the absolute fairness 
and in the knowledge of the engineer, will, perhaps as much as any 
other factor, tend to lower the costs of work to be done. And to 
this end a uniform method of figuring the contract time rather 
than guessing at it, will, it is believed, contribute in no small 
degree. 

It is probable that the curves herein given will require modifi- 
cation in some instances to make them fit to the experience of 
other localities, and it is possible that a further study of data 
similar to that upon which these curves are based may lead to 
somewhat higher or lower averages of performance, resulting in 
shorter or longer contract time. 

Economical Speed in Building Construction. — The conclusion 
of one of Aberthaw's Texts 1 reads as follows: "The judgment 
and experience of the estimator, in any given instance, must be 
relied upon to evaluate the influence of modifying elements of 
time, place and special circumstances." Angus B. MacMillan, 
Engineer of the Aberthaw Construction Co., in an article in 

1 Estimating Concrete Buildings, by Clayton W. Mayers, 1920. 



202 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the May, 1920, Industrial Management, has elaborated on the 
time element and has put a rather abstruse subject into con- 
crete terms. Abstracts from his able article, as given in Engi- 
neering and Contracting, May 26, 1920, follow: 

Except where such speed is required as to necessitate pur- 
chasing materials from stock, at a price necessarily higher 
than where they may be obtained from the mill, the three main 
variables entering into the cost of building are the cost of the 
forms, the plant and the overhead expense. If the time of con- 
struction is to be shortened, the first two variables will be 
decreased, but the third will inevitably be increased. Due to 
the fact that the forms account for a much larger proportion of 
the total cost than do the other items, any material increases in 
the cost of forms will more than offset any possible gain from the 
other two items. When, however, account is taken of the interest 
on the money tied up in construction, without even considering 
the value accruing to the owner from his ability to occupy the build- 
ing sooner, a nice balance may be struck. It is in selecting the 
point at which the gains from decreased cost of some of the items, 
an increased availability will overbalance the extra cost for forms, 
that judgment is shown to best advantage by the contractor. 

Effect of Slow Construction on Overhead and Cost of Forms. — 
For a typical building, figures have been prepared on the basis of 
which a diagram is presented (Fig. 29). These figures show the 
way in which the increasing cost of forms progresses as the build- 
ing period is successively shortened, and the way in which at the 
same time the overhead costs decrease with the speed. Super- 
imposed upon these curves is one which represents the accumu- 
lating interest on the money invested, which becomes heavy 
under the slow construction period. This compound cost, as 
shown by the resultant curve, shows that the minimum is reached 
at a point somewhere between the most rapid and the most 
leisurely construction. In other words, urgency for a building 
must be very great if the highest speed is to pay; while on the 
other hand, a very slow speed of construction is also more expen- 
sive than moderately rapid progress. 

Factors That Influence Cost.— When too large a number of 
men are placed on a job, not only do they get in each other's 
way and thus interfere with each other's individual efficiency, 
but also the problem of bossing a job is greatly complicated, 



COST KEEPING 



203 



because it is usually necessary to employ one gang boss or 
leader for each 10 or 12 men, and in some cases for even smaller 
gangs. The added cost due to this loss of efficiency is, of course, 
offset against the gain in time in delivery of the building. The 
added bosses form a definite addition to the overhead on the job, 
particularly where the overcrowding of men is considerable. 
In the construction of a building, story by story, the time 
limit makes itself apparent primarily in the number of stories. 
There is no limit in the horizontal direction, except that im- 

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TIME OF CONSTRUCTION 
Fig. 29. — Economical time of construction. 

posed by the consideration of the number of men who can be 
effectively employed, and the necessity for an unfailing stream 
of materials as they are needed. But when it comes to adding 
stories to the building, the necessity of waiting after each story 
is poured until it is thoroughly set, before the next story can be 
touched, makes a very distinct limit and requires a careful 
schedule if satisfactory progress is to be made. 

Speed Limited by Supply of Materials. — The limitation upon 
speed and efficiency based upon the ability to get materials 



204 CONSTRUCTION COST KEEPING AND MANAGEMENT 

as fast as they are wanted, and yet not fast enough to clog 
the works, is important; and there is another limitation based 
upon the character and capacity of the equipment used on 
the job. In two large textile mills now being erected by our 
company in Nashua, N. H., and Lowell, Mass., respectively, 
it happens that in each case the full capacity of the gravel banks 
in the neighborhood is being utilized. As gravel forms the 
largest bulk of materials entering the job, and as the principal 
cost of gravel lies in the cost of delivery from the bank to the 
job, it is evident that only an emergency requiring extraordinary 
speed in construction would make it feasible to go farther afield 
for other sources of supply, with the attendant increase in cost of 
delivery. 

In one of these cases it happens that the layout of buildings 
in the neighborhood of this particular job is such that it was possi- 
ble to locate mixers in one place only, and in this place two 
mixers have been put. Good practice requires that the mix be in 
the mixer one full minute. As it takes about 15 sec. to fill 
the mixer and about 30 sec. to empty it, this makes a net time 
of 1% min. per batch. In practice, however, unavoidable 
minor delays easily increase this time to two minutes, so that the 
best work which can be expected from each mixer is 30 batches 
per hour. 

At 18 cu. ft. per batch this becomes 20 cu. yd. per hour per 
mixer, or 320 yd. per 8-hr. day for the two machines. That 
these machines are actually being operated at practically their 
full limit of capacity is indicated by the fact that about 2,000 
yd. of concrete are being poured per week on the job, with 1 
hr. of overtime per day, a part of which extra hour is always 
used in tuning up at starting and cleaning out at stopping. 

Sequence of Crews. — On a small concrete job, where the 
carpenter crew is only one day ahead of the mixer crew and 
the steel men working their heads off in between, and then 
frequently having to work half the night to get ready for the 
next day's run, everybody is in everbody else's way and con- 
fusion is the result. An ideal schedule puts the carpenter 
crew two days ahead of the mixer crew and the steel crew half 
way between. On a large job this schedule is very easy to 
maintain, and gives excellent results. It enables the steel men 
to do their work within the allotted daily hours, avoids confusion 
and saves much interference and hard feeling. 



COST KEEPING 



205 




100 



200' 300' 40O 1 500' 

LENGTH OF BUI LDI NG(60fee+ wide) 
Fig. 30. — Apportioning mixers to the job. 



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TIME OF CONSTRUCTION 

Fig. 31. — Broadening the labor peak. 



206 CONSTRUCTION COST KEEPING AND MANAGEMENT 

In a building measuring 200 by 60 ft., which is a very com- 
mon size for light manufacturing, we have 12,000 sq. ft. per 
floor. Including walls, columns and beams, this represents 
the pouring of about 15,000 cu. ft. or 555 yd. of concrete per 
floor. With a mixer furnishing 160 yd. per day, a floor may 
be poured completed in 3^ working days. If the schedule of 
forms provides for two floors at once, with a corresponding 
period approximating 9 days between floors, this means about 
7 working days after deducting Sundays and the inevitable 
spells of weather when work simply cannot be prosecuted effec- 
tively. As the one mixer can handle the job in 3)-^ days, it 
follows that it is operating only half the working time. See 
Fig. 30. The mixer crew consequently has to be given other work 
over the balance of the time unless a smaller mixer is used, in 
which case the mixer crew is larger per unit of output than with 
a mixer of standard size, and consequently the unit cost is higher. 

Number of Sets and Reuse of Forms. — If the job permits 
the use of three sets of forms, and consequently reduces the 
average time per floor to six days, the mixer is kept busy nearly 
the entire time, and a much better mixer efficiency is obtained 
without using the men for other work. If, on the other hand, 
it is planned to use only enough forms for one floor, and to strip 
and reuse these forms, the schedule is opened up to 12 days per 
story, of which 9 or 9}4 days are working days. Here the mixer; 
capable of doing its work in three and a half days, is working 
considerably less than in 40% of the time. 

A modification of the above reasoning may be found on large 
buildings, even though the period between floors be as great as 
12 days. For instance, on a five-story building, where the 
length of building was 500 ft. and the schedule was 12 days, 
with about 25% more forms than were necessary for one floor 
only, the mixers were so adjusted to the job that they were kept 
continuously busy in furnishing concrete for bay after bay, until 
the end of the building was reached. By this time the 12 days' 
period at the other, end had elapsed, and the second and sub- 
sequent floors could be poured immediately after the completion 
of the far end of each next lower floor. 

Under conditions such as those obtaining in connection with 
the building of a plant for emergency war work, like this, or as in 
the case of the destroyer plant at Squantum, consideration of 
cost of forms does not enter. Here the requirement was to get 



COST KEEPING 207 

the buildings out in the shortest possible time in which they 
could safely be constructed. Sufficient lumber to take care of all 
necessary simultaneous form work was on the job, and there was 
no hold-up in waiting beyond a reasonable time for the concrete 
to set. 

Distribution of Man Days. — In one case in New York state, 
however, a different condition was met. Here the demand 
for the new building was not urgent. It was located in a small 
town where the capacity for caring for a large influx of workers 
was very meager. There were not sufficient boarding houses or 
hotel accommodations to handle more than a fraction of the 
number of men who would have been there for 3 or 4 weeks at the 
peak of the work. Rather than put the community to the 
inconvenience of arranging to accommodate these men for such a 
short period, a schedule was arranged which distributed the 
peak over a much longer interval and made use of many fewer 
men. The maximum number of men on the job was thus 
reduced by about 30%. Figure 31 illustrates how this worked 
out with regard both to the length of the peak and the number of 
men. 

It will be noted, of course, that the number of man-days 
was approximately the same in each case, but the distribution 
of these work-units was different. There was a large element 
of policy in the arrangement for it was recognized that the 
manufacturer whose operation was a large part of the life of the 
community would continue to operate there for many years, 
and could not afford to upset the town by over crowding it with 
workers for the short period and then dropping them out 
completely. 

From the above it will be evident that the mere question 
of dollars and cents is not always the answer, when economy 
is under consideration. The good will of the inhabitants of 
a small town may take precedence over need of manufacturing 
space to the extent of delaying a building for a month, as was 
the case above. 

Colt's Plant Completed on Schedule Time. — Engineering 
Record, Feb. 3, 1917 describes the methods of construction of a 
large reinforced-concrete building for the Colt's Patent Fire 
Arms Manufacturing Company, of Hartford, Conn., which was 
carried out in accordance to the day with a previously published 
progress schedule. The builders, the Aberthaw Construction 



208 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Company, of Boston, did not reach this result by elaborate or 
unusual procedure, and but three months elapsed between the 
owner's decision to build and the completion of the four-story 
frame inclosing a floor area of 11.2 acres. Indeed, the only 
departure from the firm's customary practice in handling the 
work is stated to have been the advance publication of its prog- 
ress schedule. The story of the planning and execution of this 
achievement is one of the application of hard common sense, 
with accuracy of detail but without delay of red tape, to the 
problem in hand. 

By telephone appointment the contractors' engineers met 
the owners' representatives and the architects, Monks & Johnson, 
at Hartford on Monday, Aug. 21, 1916. The location and size 
of the building were there decided, and the conditions under 
which it should be built were arranged between the owners and 
the contractors. The work was undertaken upon a cost-plus- 
profit agreement, the same as on a previous building recently 
completed. The contractors became in effect the building 
department of the owners, bought all labor and materials, made 
all subcontracts and charged up everything at cost. For their 
executive services and profit they received a commission. 

Plans and Work Start Together. — The architects immediately 
began on the plans, the contractors made up a probable square- 
foot-of -floor cost, began the clearing of the site and digging of test 
pits, and secured bids on footings and pile foundations. Coinci- 
dentahy, after a quick but thorough survey of local conditions, 
such as the available vacant land, the railroad siding, the prob- 
able streets along which materials could be delivered, and nearby 
sources of materials that would be required, the engineering 
department made its first plant layout. Bins, sheds and office 
buildings were located and a place allotted for every class of 
material arriving on the job. This layout was subsequently 
perfected in the complete plan reproduced herewith. 

At the next weekly conference of the contractor's staff the 
entire job was taken up for discussion and definite organization. 
At this conference were present the man who secured the con- 
tract, two general superintendents, the chief engineer, the 
purchasing agent and the schedule engineer. The manager, 
who usually presides, was absent. The building superintendent 
was selected, together with his principal assistants, the carpen- 
ter, labor and planning foremen, the engineer and the master 



COST KEEPING 209 

mechanic. The discussion covered plant layout, including 
number and location of mixers, method of distributing concrete, 
purchase and handling of lumber for forms, requirements in the 
way of steel and cement, prices and deliveries on these materials, 
architects' drawings, tentative progress schedule and many 
minor questions. Each man left the conference bearing definite 
responsibility for his part of the work. 

The tests of the soil resulted in a decision to use piles, and the 
contract was given to the Raymond Concrete Pile Company. 
Two pile drivers were ordered on the job. In the shipping of one, 
which came from Boston, the Aberthaw company materially 
assisted their subcontractors in making quick time. 

As a basis for all operations the schedule engineer immediately 
perfected his progress schedule, which is given in Table 10 in so 
far as it covers the direct work of the contractors. 

Between the schedule engineer and the chief engineer the 
architects were kept informed as to dates upon which drawings 
must be in hand, and requirements in the way of form lumber, 
steel, cement, etc., were furnished to the purchasing agent. 
His responsibility ended when he had placed the order subject to 
specific deliveries. The superintendent on the job, being 
informed of the conditions of these orders, thereafter assumed 
responsibility for direct following up of the requirements. Any 
cases which he could not handle were referred back to the traffic 
department of the main office. Finally, cases which were beyond 
the power of the regular staff to straighten out were turned over 
to the manager to take up with the principal authority in the 
outside organization. In the case of subcontractors who were 
manufacturers, schedules were furnished and close touch was 
kept with the dates of beginning work and shipping the finished 
products ordered. 

The situation was complicated by the New England freight 
embargo, but by having some source of supply or some method 
of handling always in reserve all serious delays were avoided. 
Plant, equipment, small tools and stationery scheduled by the 
building superintendent on a blank furnished for that purpose 
were immediately shipped. In accordance with the plant layout 
offices and storehouses were shipped from the contractor's yard, 
each building being made of standard sections 15 ft. wide in 10-ft. 
lengths. 

The order for cement was placed, the storehouse was filled 

14 



210 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Table 10. — Progress Schedule 
Item 



Start 


Finish 


Sept. 


4 


Sept. 


16 


Sept. 


11 


Sept. 


20 


Sept. 


18 


Oct. 


5 


Sept. 


14 


Sept. 


25 


Sept. 


20 


Oct. 


5 


Sept. 


14 


Oct. 


16 


Sept. 


1 


Sept. 


16 


Sept. 


20 


Oct. 


7 


Sept. 


28 


Oct. 


10 


Oct. 


6 


Nov. 


23 


Oct. 


28 


Dec. 


7 


Nov. 


7 


Dec. 


12 


Nov. 


18 


Nov, 


25 


Nov. 


18 


Nov. 


25 


Nov. 


6 


Dec. 


9 


Oct. 


13 


Dec. 


5 


Nov. 


18 


Nov. 


30 


Sept. 


7 


Nov. 


22 


Sept. 


16 


Nov. 


22 


Sept. 


16 


Dec. 


5 


Sept. 


2 


Dec. 


16 


Sept. 


11 


Oct. 


14 


Oct. 


5 


Nov. 


?,?, 


Sept. 


16 


Oct. 


7 


Oct. 


5 


Nov. 


22 


Oct. 


5 


Nov. 


2?. 


Oct. 


5 


Dec. 


15 


Sept. 


16 


Oct. 


8 


Sept. 


25 


Oct. 


11 


Oct. 


6 


Nov. 


21 


Oct. 


6 


Nov. 


21 


Oct. 


6 


Nov. 


21 


Oct. 


6 


Nov. 


21 


Nov. 


15 


Nov. 


29 


Nov. 


6 


Dec. 


14 


Oct. 


25 


Dec. 


14 


Nov. 


15 


Nov. 


25 


Sept. 





Oct. 


5 


Oct. 


13 


Nov. 


25 


Oct. 


18 


Dec. 


5 


Nov. 


6 


Nov. 


18 


Nov. 


7 


Dec. 


12 


Nov. 


8 


Dec. 


16 


Oct. 


16 


Nov. 


30 


Oct. 


30 


Dec. 


9 


Oct. 


25 


Dec. 


9 


Oct. 


20 


Dec. 


13 


Nov. 


6 


Dec. 


20 


Oct. 


25 


Dec. 


10 


Nov. 


15 


Dec. 


16 


Oct. 


9 


Nov. 


25 


Oct. 


9 


Nov. 


25 


Oct. 


9 


Nov. 


?5 


Oct. 


15 


Dec. 


15 


Dec. 


21 


Dec. 


30 


Sept. 


14 


Dec. 


30 


Aug. 


30 


Dec. 


30 



Clearing of site . 

General excavation 

Footing and foundation walls 

Rolling for paving 

Backfill and grading 

Driving of piles 

Test pits 

Concrete 

Footings and foundation walls 

Paving 

Floors and columns 

Stairs 

Sills and coping 

Parapet 

Penthouse 

Granolithic finish 

Carborundum rub 

Cinder roof .' 

Unload cement 

Unload sand 

Unload stone 

Unload, erect and dismantle plant. . . . 
Steel Reinforcing 

Unload 

Bend and place columns 

Bend and place footings and walls 

Bend and place floor 

Bend and place beams 

Bend and place miscellaneous parts . . . 
Forms 

Footings and foundation walls 

Make columns, floors and bins 

Erect columns 

Erect floors and roof 

Erect beams and slab 

Erect wall beam 

Erect parapet 

Sills and coping 

Stairs 

Penthouse 

Unload lumber 

Strip columns 

Strip slabs 

Steel sash — -Unload 

Steel sash — Erect 

Steel sash — Grout 

Masonry 

Unload brick and tile 

Lay tile 

Lay brick 

Staging and plant 

Plastering 

Door frames, guards and sills 

Doors and hardware 

Inserts 

Sleeves 

Scuppers 

Miscellaneous iron work 

Clean up job 

Watchman 

Overhead 



in advance of requirements, continuous shipments from the mill 
were maintained, and arrangements made with a local dealer so 
that his stock could be drawn upon in case of emergency. Sand 
and gravel were contracted for locally and hauled from near-by 
banks, of which the number was sufficient to guard against a 



COST KEEPING 



211 




fPoas/W 



212 'construction cost keeping and management 




COST KEEPING 



213 



tie-up with any one contractor. The storage bins were kept filled 
and daily deliveries made direct to the mixers. All scheduled 
form lumber, cut to dimensions, was turned out by a local mill, 
delivered on the job and piled separately according to size, ready 
for use. Because of the close proximity of the mill, and the fact 
that others stood ready to meet the requirements, daily deliveries 
were made and only a limited supply of lumber was kept on the 
ground. 



PBOGOCSS SCMtDulX 




Oeor Ste 

General Etcovolion 
Fccf-ng c^d Poundal^n 
fol/no for Pb+n? 
BacfdW and Grading 
ftofit for Pile Driving 
Aduol Pile Driving 



Hoars and Columns 



Unload Cement 

Sand 

Stone 
Concrete Plant 

Unload 

Bend and Pacing fbo'.rjs and Vfolb 
" " Columns 

• Poors 

.Wrsce/foneout 
Fermi 
footing otd foundo'-on Hbl/j 
M**» Cotomns, Phot? and Beams 
fact Columns 

Floors arts' fibof " 
r Beams and Slabs 
* Wall Beams 



r%ni House 
I <load Lumber 
Strip Slobs 
- Columns 

Shsi Sosh 
Unload 
Erect 

Mas-tvy 

d Bnek and ) 



Door frame. Guards and SfL* 
Doors and fiardiyore 

Mec*lloneovs 
Ubod Portions 
Clean-up Job 
Hblcbmort 
Overhead 

S/bconh-oct 



Fig. 34. — During progress of job vertical lines showed dates, while crayon lines 
represented quantity of work done. 

To start the job reinforcing steel was shipped from the Aber- 
thaw yard in Boston. With the exception of a few local emer- 
gency purchases handled by truck or auto there was no tie-up on 
account of steel, notwithstanding the freight embargo. 

In the matter of labor the company's usual policy of trans- 
ferring men from other jobs where they could be spared was 
maintained. Through the avoidance of hiring and discharging 



214 CONSTRUCTION COST KEEPING AND MANAGEMENT 

on the job the contractor has been able to build up an organi- 
zation in which even the members of the shovel brigade average 
2 years connection, while concrete laborers, steel men and 
carpenters remain 3 and 4 years in the service of the 
company. A material factor in holding men together is the 
maintenance of the same rate of pay no matter where the man is 
at work. The number of men employed on the job on each of the 
principal dates specified in the construction schedule is given in 
Table 11. These are grouped according to the character of the 
work. 

The chart, Fig. 34, graphically represents the dates and limits 
and served as a basis for recording progress. Three blueprints 
of it were sent to the job, one" for the superintendent, one for the 
routing department and a third to be brought up to date weekly 
and sent to the Boston office. Another copy was kept on the 
bulletin board in the Boston office, and was brought up to date 
weekly from the copy sent in by the job. On the blank blue- 
print each item of work was represented by a wide white line. 
When an item of work was started it was recorded on the sheet 



Table 11. — Men Required by Schedule 



Oct. 6 Oct. 21 Nov. 2 Nov. 13 Nov: 23 



Laborers (including steel 
men) 

Labor foremen 

Carpenters 

Carpenter helpers 

Carpenter foremen 

Master mechanics and 
mechanics 

Cement finishers 

Masons and tenders 

All others 

Totals 



83 

7 

17 

26 

5 



18 



165 



79 

7 
31 
42 

6 

16 
6 

21 

208 



109 

9 

44 

73 

6 

14 

16 

8 

12 



291 



96 

8 

46 

81 

6 

15 

14 

9 

25 



90 

5 

28 

49 

6 

15 
16 
18 
21 



300 



248 



by drawing a yellow line over the upper half of the heavy hori- 
zontal line. The length of the yellow line was made proportional 
to the amount of work done on that item, the entire heavy line 
representing volume rather than time, although it spans the 
period between the scheduled beginning and ending. It is 



COST KEEPING 215 

therefore evident that the ratio of the length of the yellow line 
to the total length of the heavy line represents the proportion 
of the particular item of work which had been completed. 

In operating such a chart, when work does not start on time 
a red line is drawn over the lower half of the heavy white line 
and is continued to the date when the work starts, when the 
yellow line is begun in its proper place. The red line therefore 
shows at a glance just how far behind work is upon the given 
item. Each week a piece of string is stretched vertically across 
the chart from the current date shown at the top of the sheet. 
If at any time the yellow lines extend beyond this string it indi- 
cates that the job is ahead of schedule on that particular item. 

"Finished to Schedule." — Unusual attention was directed 
to the building by the advance publication of the proposed 
construction schedule and the issuing of periodic bulletins 
showing by photographs how it was being met floor by floor. 
Although the complete schedule was detailed nearly ten weeks 
in advance of the date of pouring the roof, the suggestion of 
publishing it was not made until some time later. Instructions 
were then given that work was to proceed exactly as on any other 
job. The principal dates in the construction schedule as pub- 
lished were as follows : 

Oct. 6 Start superstructure 

Oct. 21 Finish pouring concrete, second floor 

Nov. 3 Finish pouring concrete, third floor 

Nov. 13 Finish pouring concrete, fourth floor 

Nov. 23 Finish pouring concrete, roof 

After making the usual allowance for stormy weather the 
schedule showed 42 working days for completing from founda- 
tions to roof the four-story concrete building, which is 490 by 60 
ft., with a 60-ft. square wing at each end, and has a plan area of 
2.8 acres. Although the work was actually completed in 40 
days, this was not due to speeding up, but merely to the fact 
that the anticipated number of stormy days did not materialize. 
In a word, the schedule was met to a day so far as the actual 
working period was concerned. 

Progress and Cost Chart. — Figure 35 is of another type of 
progress chart. This chart shows the labor, material and total 
costs both actual and estimated, together with the number of 
units of material placed. 



216 CONSTRUCTION COST KEEPING AND MANAGEMENT 



TYPICAL PROGRESS CHART 

5 10 15 20 25 5 10 15 20 25 5 10 15 20 25 



)f Work in Dollars 

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100000 
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20000 



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5 1015 20 25 
March 



5 10 15 20 25 
April 



5 10 15 20 25 
May 



COST KEEPING 217 

With such a chart it is evident that at any date the following 
items may be seen : 

1. Total quantity of material placed. 

2. Cost of labor, material and total cost. 

3. Days of lost time by counting the number of days that 
material line runs horizontal. 

4. The progress of the work-percentage completed to date. 

5. Percentage of work done from one date to another by sub- 
tracting totals of the two dates. 



CHAPTER VI 

COST KEEPING AS APPLIED TO HIGHWAY 
CONSTRUCTION 

The material of this chapter is abstracted from Bulletin 660 of 
U. S. Dept. of Agriculture, entitled "Highway Cost Keeping," 
by J. J. Tobin and A. R. Losh, and reviewed by one of the 
authors of the present work. Besides some extremely practical 
material that applies directly to highway engineering, it covers 
some very sound and interesting matter pertaining to all cost 
keeping in general. 

THE FUNDAMENTALS OF COST KEEPING 

Definition. — Cost keeping is a system for recording the cost of 
each unit of product or division of work in order to facilitate com- 
parison of such costs with cost of other similar units or divisions 
under like conditions. Cost keeping analyzes each unit of 
product or work to determine the reasonableness or unreason- 
ableness of the cost, and also to secure an intelligent basis for 
predicting the cost of producing similar units in future. 

Lack of Cost Records. — The Office of Public Roads and Rural 
Engineering, in an extensive investigation of highway manage- 
ment, both by the State highway departments and by a large 
number of individual counties and townships, brought out, 
among other conditions, the very general absence of cost keeping. 
Few examples of practical and efficient cost keeping were found 
in operation, and these were confined largely to the State high- 
way departments. Only in rare instances were cost-keeping 
systems found in counties or townships. This condition is due 
largely to the notable scarcity of information available on the 
subject of highway cost keeping, as practically all textbooks on 
cost keeping have been prepared from the viewpoint of factory 
management and are not readily adaptable to highway work. 
Furthermore, the usefulness of highway cost data has not yet 
been generally appreciated by public officials. 

Purpose of the Bulletin. — The purpose of this publication is to 
present, first, in an elementary way the principles which govern 

218 



COST KEEPING OF HIGHWAY CONSTRUCTION 219 

cost keeping; second, a practicable application of those principles 
to highway work. 

Development of Cost Systems. — Cost keeping was developed 
in the manufacturing industries. To Charles Babbage has been 
conceded the honor of having first called the attention of the 
manufacturing world to its desirability, in 1832, in his publication 
entitled "The Economy of Manufacture." Half a century 
elapsed, however, before factory managers, forced by relentless 
competition to eliminate waste and incompetency from their 
factories, began to introduce systems of cost keeping. 

Since 1900 the use of cost keeping in manufacturing industries 
has developed steadily. During this period of development prin- 
ciples regarded as basic have been established. While cost keep- 
ing for highway work is of comparatively recent origin, it is 
based upon factory cost keeping, and the same principles govern. 

COST ELEMENTS 

The term "cost/' as generally interpreted and as used in this 
bulletin, is the summation of expenditures expressed in terms of 
money involved to acquire or produce a utility or to perform a 
service. 

The cost of every unit of product, whether it be a square yard 
of road surface maintained, or a cubic yard of concrete which is a 
part of a bridge or culvert, is composed of four basic elements of 
expense, namely: 

1. The cost of labor. 

2. The cost of materials. 

3. The cost of service of plant and equipment. 

4. The cost of general expense or overhead. 

Labor. — The costs of labor are divided into two classes; first; 
direct labor cost; and, second, indirect labor cost. All labor 
chargeable against the product which can be designated as directly 
expended on it is called direct labor. All labor chargeable against 
production and not directly expended on the product is called 
indirect labor. For example, the cost of men using picks and 
shovels on excavation who are directly expending their efforts on 
that piece of work is a direct labor charge. A superintendent 
in charge of a road job is not directly expending labor on excava- 
tion, but is engaged in directing the prosecution of all kinds of 
work and his expense is an indirect labor charge, chargeable 



220 CONSTRUCTION COST KEEPING AND MANAGEMENT 

pro rata against the production of all the work units he may be 
supervising. Other examples of indirect labor are the services 
of watchmen, timekeepers, and water boys. 

Materials. — Materials also are divided into two similar classes 
— direct and indirect. All materials entering the product as an 
integral part of its composition are called direct materials. All 
materials chargeable against the production but which do not 
enter directly into the product as an integral part of it are called 
indirect or expense materials or sometimes supplies. The cement, 
stone, and sand that are mixed together to form the concrete of 
which a concrete road is constructed are all direct materials, but 
the oil used for lubricating and the gasoline for operating the 
mixer in which these materials are prepared for use are indirect 
materials or supplies. It is easy to charge direct material cost, 
but often it is very difficult to charge to each product its correct 
share of indirect material cost. 

Small, or hand, tools not used as a part of some plant unit and 
which have such a short period of usefulness that they are seldom 
used on more than one job, usually are considered supplies and 
therefore are part of the indirect materials charged to the work. 

Plant and Equipment. — " Plant" includes such physical prop- 
erty used on the work as land, structures, machinery, live stock, 
and tools of a more permanent character than those referred to as 
supplies. " Equipment' 7 is a less inclusive term and is inter- 
preted generally to mean the smaller and especially the movable 
plant units. The cost of the service of "plant" can be charged 
most readily in the form of a daily rental against the work upon 
which it is used. This rental should be charged whether the 
equipment be owned by the operating organization or leased from 
other owners. It consists of " operating charges," which are — 

(a) The expense of operation, 

(6) The average cost of repairs, 

(c) Charges for the time spent in idleness, 
and "fixed charges, "which are — 

(d) Charges for depreciation, 

(e) Interest, 
(/) Taxes, 

(g) Insurance. 

The Expense of Operation. — This includes the wages of opera- 
tors and helpers and the cost of supplies during the periods of 
operation. Usually these are charged directly against the work 



COST KEEPING OF HIGHWAY CONSTRUCTION 221 

done and not included in the plant rental. It is only necessary 
that they be charged in one place or the other, and it is important 
to specify what is included in rental when leasing equipment. 

The Average Cost of Repairs. — There is a difference of opinion 
among cost accountants as to how repairs and renewals to plant 
should be charged. One view is that renewals may be of such 
a nature that the useful life of the machine has been increased 
and therefore the expense of such renewals should be looked upon 
as an offset to depreciation. Another view is that there is no 
difference between repairs and renewals, except in degree, and 
that they all should be considered in the same light; i.e., indepen- 
dent of depreciation charges. It appears that the latter consid- 
eration permits simpler accounting and does not rely so much 
upon individual judgment as to whether the expenditure is for 
repairs or for renewals. 

After a machine has been rebuilt or repaired extensively with 
the intention of increasing its serviceable life, it should be con- 
sidered as a piece of new equipment valued at its depreciated 
value, plus the cost of renewals. This necessitates the computing 
of a new rate of depreciation on the basis of the new value and 
assumed new useful life. 

The approximate average cost of repairs, including extraor- 
dinary repairs, often can be arrived at by casting up old accounts 
and finding what a similar piece of machinery used on similar 
work has cost for repairs over a term of years. 

Charges for Time Spent in Idleness. — To arrive at a fair and 
equitable daily charge for rental some allowance must be made for 
time spent in idleness, because on these days the fixed charges 
still are continuing and certain supplies are necessary even though 
the machine be not in operation. The usual way of arriving at 
the charge for lost time through idleness is to bring together all 
of the charges for a year and divide them by a number of days 
the machine actually was in use. By dividing the sum total of 
expense by the number of days the machine was available for 
use even though no work existed on which it could be used, the 
result would be a daily rental with no allowance for lost time. 
The difference between these two rentals will show what a con- 
siderable factor in the fixed charges this item of lost time may 
become. In all contracts or agreements on rental of equipment 
care should be taken to specify whether the rental is "per day" 
or "per day of service." 



222 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Charges for Depreciation. — Equipment is consumed in pro- 
duction just as truly as material. This loss is called natural 
depreciation. Depreciation may be either natural or functional. 
" All equipment progresses steadily toward the scrap pile, starting 
the date it is purchased, and while its progress may be delayed 
it can not be prevented by repairs." 1 It is as much an expense 
on a steam roller as the cost of fuel burned in the firebox. In 
the case of fuel the expense is immediate; in the case of deprecia- 
tion the expense is extended over a period of time. Functional 
depreciation is loss due to the obsolescence or inadequacy of 
equipment. 

There is no doubt in the minds of cost accountants that depre- 
ciation of plant and equipment should be included as a charge 
against operation, but there is considerable difference of opinion 
as to how depreciation should be computed. 

Three factors determine in all cases what the depreciation 
should be: First, the original cost; second, the length of useful 
life; and third, the scrap value of the machine when it no longer 
can be used for the purpose for which it was purchased, or the 
salvage value, if it is to be considered as a " second-hand" piece 
of equipment. Knowing these factors, the problem resolves itself 
into how to divide the difference between the original cost and the 
scrap or salvage value (called total depreciation or wearing value) 
over the length of the useful life of the machine. A number of 
formulas have been devised for computing decrease in value or 
depreciation. Fish,in his textbook on "Engineering Economics," 
explains five such formulas. Three of the more commonly 
used are the straight line, the declining balance, and the sinking 
fund. 2 

The first is recommended as the simplest and perhaps best 
method for road work. By this method the total depreciation 
is divided by the number of years of useful life and the quotient 
charged off as a yearly depreciation. This is called the straight- 
line method, and its greatest advantage is its extreme simplicity. 

The second method, a modification of the straight-line method, 
is called the declining balance method. It is based on the theory 
that during the earlier years of the life of any machine the repairs 
are smallest, and therefore to arrive at a constant charge for repair 

1 "Modern Accounting," H. R. Hatfield. 

2 The "Unit Cost Depreciation Formula," which is the only one that 
is perfectly general and theoretically correct, is given in the Handbook of 
Mechanical and Electrical Cost Data by Gillette and Dana. 



COST KEEPING OF HIGHWAY CONSTRUCTION 



223 



and depreciation, the depreciation must be heaviest in the earlier 
years of the life of the machine and lightest in the last. The plan, 
therefore, is to charge off a fixed percentage annually from the 
net value of the machine. This gives a diminishing annual 
charge for depreciation. In the comparative table (page 224) 
this annual rate is about 30 %. This is determined by the for- 



mula r = 1 



^7 — in which r is the percentage of diminishing 

value, n the life of the equipment in years, Vi the original value, 
and v 2 the scrap value. 

COMPARISON OF DEPRECIATION FORMULAS 




USEFUL UFE IN YEARS 

Fig. 36. 

The third method is called the sinking-fund method. It is 
based on the assumption that the depreciation on a structure at any 
time is equal to the accumulations of a sinking fund established 
for renewal at the end of its useful life. The depreciated value 
plus this sinking fund (actual or imaginary) at any period equals 
the original cost. 

It should be observed that none of these formulae takes into 
consideration interest on investment, output, cost of operation, 
or maintenance charges. Figure 36 gives a graphic comparison 
of the above formulas. 

The following table is a comparison of the annual depreciation 
on a $600 machine that has an assumed useful life of 5 years. It 
also is assumed that at the end of this period it will have a scrap 
value of $100. The annual depreciation is computed by the three 
formulas described: 



224 CONSTRUCTION COST KEEPING AND MANAGEMENT 
Table 13. — Comparison of Three Methods op Computing Depreciation 









Sinking- 




Straight- 


Diminish- 


fund 


Years 


line 


ing-value 


method, 




method 


method 


6 % 
interest 



First 


$100 
100 
100 

100 
100 


$180.72 

126.28 

88.25 

61.67 

43.08 


$88 . 70 


Second 


94.02 


Third 


99.66 


Fourth 

Fifth 


105 . 64 
119.98 


Total 


500 


500.00 


500.00 



The theory of natural depreciation, epitomized, is that all 
equipment, even if kept in the best of repair, in time will reach a 
state where repairs no longer are sufficient to keep it in economi- 
cal working condition and the entire machine must be renewed. 
The fund created by the depreciation charges is intended to 
supply the money to purchase a new machine to take the place 
of the one expended, or to retire the original investment in case 
the machine no longer is needed. 

Any of the depreciation formulae is satisfactory in determining 
rental charges, provided the assumed life of the machine be 
approximately correct. As the assumption of the useful life 
of the machine may be the source of considerable error, there 
seems to be little argument for the finer calculations as to methods 
of distributing the depreciation. 

It will be found convenient in computing depreciation to group 
elements of the plant having approximately the same serviceable 
life. This will have the advantages of requiring fewer accounts 
and tending to equalize high and low assumed machine life. 

Repairs and renewals are charges due to breakage or the wear- 
ing out of expendable parts of equipment. It is obviously in- 
correct to charge to repairs or renewals any improvements or 
betterments added to any piece of equipment. When such 
improvements have been made the cost should be added to the 
present value of the machine and a new depreciation computed 
upon this new value. An example of such a case would be the 
addition of a conveyor to an old stone crusher for the purpose 
of doing away with shovelers. The improvement is not a repair 
of any broken parts or a renewal of any part worn out by the 



COST KEEPING OF HIGHWAY CONSTRUCTION 225 

continual use of the machine; it is a new feature which adds to 
the value of the crusher. A rebuilt second-hand machine may be 
considered in the same light. 

Interest, Taxes, and Insurance. — Interest should be charged 
on the investment at the rate paid or the prevailing rate, where 
there is no indebtedness. 

Taxes, as paid, should be charged in the rental rate. 

Insurance should be charged either as paid or at the prevailing 
rates if the organization carries its own risk. 

General Expenses. — The fourth element of cost is general 
expense. It often is called "overhead" or. "burden," terms 
derived from factory cost keeping, the use of which in highway- 
cost keeping is not recommended. 

General expense includes all charges that can not be connected 
directly with the cost of labor, material, and plant. For con- 
venience in accounting and for the purpose of securing a desirable 
division of road cost, general expense will be considered as divided- 
into two classes. One will be referred to as "engineering and 
supervision" and will include those items of inspection and 
engineering which can be charged directly to the project. The 
other class will be referred to as "administration expense" and 
include those expenditures incurred, in conducting all the activi- 
ties of the department which are so general in character that 
they are not assignable directly to any particular project. 

The desirability of separating the project cost of engineering 
and supervision from administration cost and unit costs will be 
apparent after a little consideration. The work of the engineer 
in preparing the plans and specifications affects labor and ma- 
terial costs only in the kinds and amounts that may be required 
and not at all in the efficiency of their expenditure. By carefully 
worked out profiles and cross-sections an engineer may reduce 
the yardage of excavation required, but such planning may not 
reduce the cost per unit of excavation. To secure efficiency in 
operations in the function of the superintendent or the foreman 
who is responsible for the cost of such operations. If engineering 
and supervision cost is incorporated in unit cost, an element is 
included over which the foreman or superintendent has no con- 
trol, and his efficiency is obscured thereby. If, on the other 
hand, engineering and supervision cost is included in the charge 
for administration, it is placed in a class of expenditures over 
which the engineer has little or no control. 

15 



226 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Highway administrative organizations are prescribed largely 
by statute and the attendant costs necessarily are dependent, 
in a large measure, upon the form of the organization, the various 
duties required, the methods of financing, and many other factors, 
all of which are conditions imposed by legislation. To include 
with these administrative costs the cost of project engineering 
and supervision would mean the loss of valuable comparable 
information on the efficiency of the divisions of an organization 
and one type of administrational organization with another. 

Administration. — Administration costs include such expendi- 
tures as salaries and expenses of the executive officers, legal 
services, maintenance of office, departmental engineering, in- 
vestigations, experiments, clerical staff, fiscal operations, and 
miscellaneous fixed charges. These expenditures can not be 
allotted directly to any particular class of work or to individual 
projects. 

- Cost accountants have devised numerous ways of distributing 
general expenses to the various classes of work. Most of these, 
however, are not practicable in the distribution of such expenses 
on road work. Since indirect labor and indirect materials are 
distributed directly in the unit costs, and engineering and super- 
vision are chargeable directly, to projects, the remaining portion 
of what would be considered "burden" by factory cost account- 
ants is comparatively small in proportion to the aggregate 
expenses. Any portion of general expense that can be assignable 
directly to a project should be charged against such project. 
The remainder should be prorated over all the project expendi- 
tures for the period. 

Engineering and Supervision. — To engineering and supervis- 
ion should be charged all expenditures for surveys, plans, 
specifications, estimates, tests, and all engineering inspection and 
supervision in the nature of oversight required to secure the 
proper execution of the work. Such expenditures can be charged 
directly to individual projects. 

Fixed Charges. — Fixed charges are those items of expense 
which go on practically unchanged irrespective of the activities 
of the organization. Those fixed charges which pertain to the 
production plant have been discussed in relation to plant and 
equipment. Certain fixed charges not immediately connected 
with production operations may best be considered as a part of 
general expense. Thus depreciation, interest, taxes, and insur- 



COST KEEPING OF HIGHWAY CONSTRUCTION 227 

ance are elements of expense also in relation to the plant and 
equipment of the administrative organization, such as buildings, 
office and laboratory equipment, instruments, machines, and 
similar items. 

In the practical application of cost keeping, fixed charges are 
considered only in so far as they aid in the determination of 
efficiency, and their inclusion as an item of cost is a question of 
accounting. Where fixed charges result from methods of financ- 
ing rather than the methods of doing the work they belong to 
the field of bookkeeping and not cost keeping. Thus, where a 
county issues bonds for road improvement the interest is a 
fixed charge which must be paid and so increases the total outlay 
for the improvement but has no relation to the efficiency with 
which the work is executed, and is, therefore, a matter of book- 
keeping and not cost keeping. Where two crews are engaged 
in excavation, one with power tools and the other with hand 
tools, fixed charges are of prime imporance to the cost keeper 
for the purpose of determining efficiency and the cost of operation 
in each case. 

It is customary among contractors to include all fixed charges 
as a part of the expense of work, and therefore they appear in the 
unit prices of their itemized bids. In making up his estimates on 
unit prices to check against submitted bids, the engineer therefore 
should include among other fixed charges interest on capital 
invested in plant and on necessary operating capital, for materials 
pay roll, and deferred payments. 

Considerations of fixed charges are also important in the select- 
ing of equipment and determining upon types of improvements. 
These considerations are, however, within the field of engineering 
economics and not cost keeping, although cost data have a most 
important part in the final determination. 

HIGHWAY COST ANALYSIS 

An analytical chart has been prepared to place before the 
reader in concise and convenient form a summary of the foregoing 
discussion of cost elements applied to road work, and to show the 
relation between the cost elements and the final cost of the pro- 
ject as expressed in totals and by units. The first column of the 
chart contains the four basic elements of cost. Opposite each 
element, in the second column, are the classes of expenditure, 
such as direct, indirect, etc. The third column shows in detail 



228 CONSTRUCTION COST KEEPING AND MANAGEMENT 



o s » 
a S S 






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COST 1 KEEPING OF HIGHWAY CONSTRUCTION 229 

the specific application of the cost. Example, "for materials," 
"for labor," "superintendence," etc. The fourth column 
contains a tabulation of the class of product resulting from the 
cost outlay, such, for example, as construction, maintenance, 
right of way, etc. The fifth column contains the final cost and 
presents it by units, by project, etc. 

Units of Measurement. — Care should be taken in selecting 
the units on which to collect cost data. Too many and varied 
units will make the system cumbersome and expensive, while 
too few may impair its value seriously. Furthermore, the units 
of measurement adopted for any cost-keeping system or project 
must be definite, expressive, readily obtainable, and familiar. 
Thus, for example, the ton and the cubic yard as applied to 
broken stone are definite units and afford a ready and accurate 
comparison, but the square yard when applied to a finished 
macadam road is indefinite until additional information as to the 
depth of the material is available. Similarly, many units, such 
as wheelbarrow, wagon, truck, or carload, while often convenient 
units of count in the field, are indefinite and always should be 
reduced to definite comparable units, such as cubic yard or ton. 

The units selected must, so far as possible, be expressive of 
definite operations. Thus, while in engineering construction the 
cubic yard is a very common unit upon which contract prices 
are based, it frequently is a very uncertain unit of performance, as 
it is a composite of other units. For example, in rock excavation 
there are involved the following operations: (1) Drilling, (2) 
blasting, (3) breaking large chunks, (4) loading into carts, wagons, 
cars, or the like, (5) transporting, (6) dumping. 

The important item of drilling depends largely on the neces- 
sary spacing of the drill holes, which varies in the different kinds 
of rock and in different kinds of excavation. Clearly, then, the 
linear foot of drill holes is the unit for measuring the output of 
the drillers, and not the cubic yard. Transporting the rock is 
largely a function of distance; hence the unit of transportation 
cost should be the ton or yard carried 100 ft. or 1 mile, and not the 
cubic yard without the factor of distance. 

The units must be obtainable readily or the cost of collecting 
the necessary data will be too high. Thus, for example, to obtain 
the exact cubic yardage and the distance it was moved in prepar- 
ing the subgrade for a macadam road with a road machine would 
be not only difficult but expensive. Hence for this class of work 



230 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the readily obtainable, though less definite, unit of the square yard 
usually is adopted. 

That the full value of the cost-keeping system may be realized, 
the units in which the data are expressed must be familiar to 
those charged with their collection as well as to those who are to 
profit from their use. Thus, the cubic meter is as definite a 
unit for measuring earthwork and generally as readily obtainable 
as the cubic yard, but to the average roadman it has little or no 
meaning until translated into the terms in which he is accustomed 
to think. If any one of two or more units otherwise would answer 
equally well, the one most familiar and generally used always 
should be adopted. 

There are many units so closely related to the desired unit of 
measurement that with very little computation they can be trans- 
formed into the desired unit. For example the knowledge of the 
number of bags or barrels of cement used and the proportion of 
the mixture of the concrete are functions which at once determine 
the amount of sand and stone used. A number of tables giving 
some of the more common and convenient units of measurement 
used in collecting and compiling cost data relating to road work 
are given in the Appendix. 

Essentials of a Cost System. — Certain fundamental principles 
must be followed to make any cost system successful. This 
applies to road costs as well as to factory costs. Any cost-keep- 
ing system to be successful must be (1) reliable, (2) simple, (3) 
immediate, (4) flexible, and (5) relatively inexpensive. 

1. Reliability is of paramount importance. If the data col- 
lected are not reliable, all records based upon them of course will 
be misleading and the results dangerous. Accuracy is desirable, 
but this need not be carried beyond the practical limits adopted 
for measuring the units of materials expended and the units of 
work accomplished. 

2. If simplicity be not maintained the purpose of the system 
will be defeated. Involved and complex forms are confusing to 
the recording officials, difficult to compile for study and analysis, 
and apt to be inaccurate and a useless expense. 

3. To be effective, the cost records must be susceptible of 
immediate analysis and must reach the officials responsible for 
the economic progress of the work in time to be of use. If a week 
or 10 days must elapse before wasteful methods and incompe- 
tency are discovered the information is past history and it may be 



COST KEEPING OF HIGHWAY CONSTRUCTION 231 

too late to try other methods which might rectify the detrimental 
condition. 

4. Flexibility is very desirable. The system must be elastic 
enough to provide for the recording of all classes of work, irrespec- 
tive of the size of the project, without any material change in the 
prescribed forms. 

5. Finally, the system must be relatively inexpensive. The 
cost of determining cost must be reduced to a minimum. If ex- 
pense of obtaining cost records to point out the way to efficiency 
is not much below the saving effected, they have no just claim to 
a place in any plan of management. 

Classification of Expenditures. — The first problem in develop- 
ing a cost-keeping system for highway work is to devise a general 
classification of expenditures that will conform to accounts 
appearing upon the ledger of the organization; that is, at the 
outset the cost keeper's records must tie into the bookkeeper's 
accounts. The ledger, it is well to recall, contains only as debits 
the funds received or appropriated and as credits the payments 
made from those various funds summarized from a record which 
carries the distribution of these expenditures according to sub- 
headings or primary accounts. It is usual to classify accounts 
as far as possible by departments, or with respect to certain func- 
tions for which funds are provided. Such a classification of 
accounts provides the first division for the cost keeper. This 
division gives what usually are known as the general accounts. 
Numbers or letters are used to represent these accounts, and in 
these letters or symbols we have the beginning of a code for cost 
keeping. The following classification and corresponding letters 
show a departmental division of accounts and a letter code 
suitable for highway work: 

General Accounts 

C. Construction. — M. Maintenance. — R. Reconstruction. — 
P. Plant — A. Administration. 

The first three of these, it will be observed, have to do with 
certain road operations. It will be found upon analysis that 
they consist of the operations necessary to produce or preserve 
road parts. A subdivision of these general accounts produces 
what are called the primary accounts. Such a division is shown 
below. The accompanying numbers give a development of the 
cost-keeping code; 



232 CONSTRUCTION COST KEEPING AND MANAGEMENT 



C, M, and R. Construction, Maintenance and Reconstruction 



00 to 09. Right of way. 

10 to 19. Grade and roadside. 

20 to 29. Roadway. 

30 to 39. Ditches and drains. 



40 to 49. Bridges and culverts. 
50 to 59. Supplementary parts. 
60 to 69. Engineering and supervision. 



P. Plant. 



70 to 79. Plant accounts. 

A. Administration. 
80 to 99. Administration accounts. 

The numbers preceding the primary account give the range of 
class numbers for the final cost-keeping code. Thus 30 to 39 are 
the inclusive numbers for class costs of ditches and drains. This 
first division of the general accounts would serve very satis- 
factorily for a simple cost-keeping system. In such case the first 
set of numbers could be omitted and ditches and drains would be 
represented by 39 instead of the range of numbers from 30 to 39. 

To obtain a system of class numbers for more detailed costs 
these primary accounts are further expanded as shown in the fol- 
lowing table: 

Primary Accounts and Class Code 

C, M, and R. Construction, Maintenance, and Reconstruction 



Right of Way 

00 Preliminaries. 

01 Right-of-way survejs. 

02 Right-of-way plans. 

03 Real estate. 

04 Damages. 

09 Miscellaneous. 

Grade and Roadside 

10 Cuts and embankments. 

11 Shoulders. 

12 Berms and slopes. 

13 Trees, shrubs, grass, etc. 

19 Miscellaneous. 

Roadway 

20 Subgrade. 

21 V drains. 

22 Sub-base. 

23 Base course. 

24 Intermediate course. 

25 Binder course. 

26 Cushion course. 

27 Top course. 

28 Surface. 

29 Miscellaneous. 

Ditches and Drains 

30 Ditches and gutters. 

31 Ditches and gutters, paved. 

32 Blind drains. 

33 Tile drains. 

34 Catch basins. 

35 Drainage channels. 
39 Miscellaneous. 



Bridges and Culverts 

40 Foundations. 

41 Abutments. 

42 Piers and bents. 

43 Superstructures. 

44 Box culverts. 

45 Pipe culverts. 

49 Miscellaneous. 

Supplementary Parts 

50 Signs and sign posts. 

51 Monuments. 

52 Guard rails. 

53 Curbs. 

54 Retaining walls and parapets. 

55 Riprap and revetments. 

56 Roadside treatment. 

59 Miscellaneous. 

Engineering and Supervision 

60 Location and relocation surveys. 

61 Surveys (for operations). 

62 Plans. 

63 Specifications and contract preparation. 

64 Estimates. 

65 Expense of awards. 

66 Office expenses, engineering. 

67 Supervisory engineering. 

68 Inspection and tests. 

69 Miscellaneous. 



Primary accounts. 



COST KEEPING OF HIGHWAY CONSTRUCTION 233 

P. Plant and Equipment 

70 Buildings, fixtures and grounds 

71 Quarries, pits, material yards, etc. 

72 Power tools and equipment. 

73 Hand tools and equipment. 

74 Livestock and vehicles 

75 Camp equipment. 

76 Camp buildings and shelters. 

77 Storage and transportation. 

79 Miscellaneous. 

A. Administration 

80 Executive 
90 Maintenance of office. 
92 Legal. 

94 Clerical. 

95 Fiscal. 

97 Engineering, departmental. 
99 Miscellaneous 

Note. — It will be observed that no divisions beyond primary accounts have been provided 
under Plant and Administration. These can be expanded further to meet the requirements 
of the organization. 



■ Primary accounts. 



Operation Code. — The next step is to develop a series of op- 
erations and a corresponding code which will include all the 
operations performed by the various departments to construct 
and maintain the works under their supervision. This may be 
accomplished in either of two ways. One is to list with each 
class of work all the operations that are performed under it. 
The other is to designate an operation by symbol and prefix this 
symbol with a class symbol, designating the class of work. By 
the first method such an operation as "rolling" would be listed 
under each roadway part and for both construction and mainte- 
nance. In the latter method, which is followed in this bulletin, 
"rolling" occurs only once in the operation code and the class 
code symbol is prefixed to give it the distinguishing classifica- 
tion. Thus any work can be indicated by combining a class code 
symbol and an operation code symbol. 

The operation code consists of a list of descriptive phrases 
arranged alphabetically and designated by consecutive numbers 
following a dash or decimal point. This dash or decimal shows 
the linking together of the classification and operation codes. 
The operation code must include all operations necessary to be 
performed and the phrases must be limited to a single interpreta- 
tion. The divisions of the primary and general accounts given 
previously form the class code. As these class code numbers 



234 CONSTRUCTION COST KEEPING AND MANAGEMENT 

represent road parts or departments of the organization, an 
accumulation of a number of operations for any particular road 
part or department is effected readily by grouping all of those 
having the same class number. Below is given a typical opera- 
tion series for the general operations of construction, reconstruc- 
tion, and maintenance of highways. A similar code could be 
devised for other operations. 



The Operation Code 



-00 Assembling. 

-01 Back filling. 

-02 Blacksmithing. 

-03 Blasting. 

-04 Building. 

-05 Building false work. 

-06 Cleaning. 

-07 Clearing. 

-08 Clearing and grubbing. 

-09 Cofferdamming. 

-10 Cribbing. 

-11 Curing concrete. 

-12 Crushing. 

—13 Dragging. 

-14 Drilling. 

-15 Drilling and blasting. 

-16 Excavating borrow. 

-17 Excavating common. 

-18 Excavating earth. 

-19 Excavating loose rock. 

-20 Excavating solid rock. 

-21 Excavating wet earth. 

-22 Filling ruts. 

-23 Filling washouts. 

-24 Finishing. 

-25 Forming. 

-26 General. 

-27 Grouting. 

-28 Grubbing. 

-29 Guarding. 

-30 Harrowing. 

-31 Hauling. 

—32 Heating bituminous materials, 

—33 Heating materials. 

-34 Laying. 

-35 Loading. 

-36 Loading and hauling. 



-37 Loosening. 

-38 Mixing. 

-39 Mixing and placing. 

-40 Moving. 

-41 Operating. 

-42 Oiling. 

-43 Painting. 

-44 Patroling. 

-45 Pile driving. 

-46 Placing materials. 

-47 Placing steel. 

-48 Planting. 

-49 Plumbing. 

-50 Plowing. 

-51 Pumping. 

-52 Quarrying. 

-53 Removing snow. 

-54 Repairing. 

-55 Riveting. 

-56 Rolling. 

-57 Scarifying. 

-58 Screening. 

-59 Shaping. 

-60 Spreading bituminous materials. 

-61 Spreading materials. 

-62 Spreading screenings, sand, or chips 

-63 Sprinkling. 

-64 Stripping. 

-65 Tamping. 

-66 Trimming. 

-67 Washing. 

-68 Washing and screening. 

-69 Wasting materials. 

-70 Water-proofing. 

-71 Working on joints. 

-72 Wrecking. 



COST KEEPING OF HIGHWAY CONSTRUCTION 235 

Method of Obtaining Class and Operation Number from 
Code. — To procure a code number for any unit of work it is first 
decided what class of work is under consideration, and a number 
is selected from the class table. Then the specific operation is 
sought for in the second, or operation, table. The two are 
joined together with a hyphen or dash. The code letter of the 
department then may be prefixed to the first number and the 
classification symbol is complete. 

If it be desired to know the code numbers to be used for record- 
ing the labor of a man mixing concrete for use as a road top 
course the class number for a road top course first is looked up in 
the class code (page 232) . This number is found to be 27 ; then 
the operation "mixing" is taken from the operation code (page 
234) and found to be 38. Joining the two together with a dash 
produces the full code symbol 27-38. The letter "C" prefixed 
would indicate construction work, while the letter "M" would 
indicate a maintenance operation. 

Usually no classification letter will be used, but instead the 
capital letter "C," "M," or "R" will be shown on the recording 
form. If it be desired to know what code symbol to use in order 
to indicate properly the time of a man spreading bituminous 
material on a road for maintenance purposes, the letter "M" 
is set down first to show that the work is that of maintenance. 
From the class code (page 232) the number for a surface is found 
to be 28. Preceding this number with a capital letter "M" 
give M-28, which shows that maintenance work has been done 
on a road surface. Then there is selected from the operation 
code (page 234) the number for spreading bitumen, which is 
found to be 60. The code symbol for maintenance work of 
spreading bitumen on a road surface then will be M-28-60. 

Use of Code in Operations. — In actual use the cost keeper 
generally would obtain his data from the timekeeper, who would 
be charged with keeping time and costs. A code for use of the 
timekeeper would be prepared from the class and operation codes, 
which would have the advantage of being abbreviated and also 
properly arranged for the cost keeper's needs. Below is shown 
such a code, which was used on work where costs of the principal 
operations were desired, and also the expanded code, which 
was used where it was desired to make a more detailed study of 
operations for the purposes of efficiency. 



236 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Timekeeper's Code 



Abbreviated 

(1) 
19-17 Grading — rough. 



Expanded 



Grade and roadside. 
11 Shoulders: 

-56 Rolling. 

-58 Shaping. 
19 Miscellaneous: 

-07 Clearing. 

-16 Excavating borrow. 

-17 Excavating common. 

-19 Excavating loose rock. 

-20 Excavating solid rock. 

-28 Grubbing. 

-31 Hauling. 

-35 Loading. 



(2) 
20-59 Grading— fine. 

(3) 
23-26 Base course — general. 

(4) 



20 



23 



23-34 Base course — laying. 

(5) 

23-56 Base course — rolling. 

(6) 

23-62 Base course — spreading sand 

and chips. 

(7) 

27-36 Top course — loading and 27 

hauling. 

(8) 

27-34 Top course — laying. 

(9) 

27-60 Top course — spreading 

bitumen. 

(10) 

27-24 Top course— finishing. 23- 



Roadway. 
Subgrade : 
-56 Rolling. 
-59 Shaping. 
-63 Sprinkling. 
Base course: 
-12 Crushing. 
-31 Hauling. 
-35 Loading. 
-56 Rolling. 

-61 Spreading materials. 
-62 Spreading screenings, sand, 

and chips. 
-63 Sprinkling. 
Top course: 
-31 Hauling. 

-32 Heating bituminous materials. 
-35 Loading. 
-56 Rolling. 
-60 Spreading bitumen. 
-61 Spreading materials. 
-62 Spreading screenings, sands, 

and chips. 
-06 Cleaning base. 



The timekeeper had only ten code numbers for general use, but 
where detailed costs were desired in order to determine relative 
efficiency and to eliminate wasteful methods 28 code numbers 
were used. 

Detail of Cost Accounts and Necessary Codes. — The detail in 
which costs are recorded must be left to the judgment of the 



COST KEEPING OF HIGHWAY CONSTRUCTION 237 

supervisor or engineer in charge of the work. Unnecessary- 
refinements are not desirable, as they only increase the work of 
those who used the data. On the other hand, divisions that are 
too general and inclusive will prevent the study of results for the 
purpose of promoting efficiency. The use or final disposition 
of the data is the factor which should determine the necessary 
details. 

For example, let it be assumed that a county engineer or 
superintendent desires costs on a brick road for the purpose of 
making reports on expenditures to the board of highway super- 
visors. In this case summary costs of completed parts probably 
would meet the requirements. The divisions would logically be 
the main divisions of the road and the costs would be collected 
by these divisions. This would provide the simplest division 
and consequently the simplest code, which for the case assumed 
would be as follows : 

Cost Divisions 

Code 

Right of way 09 

Grade and roadside (or grading) 19 

Roadway (or surfacing) 29 

Ditches and drains 39 

Bridges and culverts 49 

Supplementary parts 59 

Engineering and supervision 69 

Administration 99 

The first and the last two of these divisions would be compiled 
from office data so that the cost keeper would be concerned with 
only five divisions of field data. 

The next advanced step that would be desirable in many cases 
would be the cost of major operations divided by road parts. 
This would give information suitable for the comparison of 
results with work of a like character or with unit prices or 
estimates. 

Cost Divisions 

Road pakt Operation Code 

Right of way : 

Plans and surveys General 01-26 

Real estate 02- 

Miscellaneous 09- 

Grade and roadside: 

Miscellaneous Clearing and grubbing 19-08 

Miscellaneous Excavation, common . 19-17 



238 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Roadway : 

Subgrade Shaping 20-59 

Base course Laying 23-34 

Top course Laying 27-34 

Ditches and drains: 

Paved gutter Excavating, common 31-17 

Paved gutter Laying 31-34 

Tile drains Laying 33-34 

Catch basins General 33-26 

Bridges and culverts : 

Foundations Excavating, common 40-17 

Foundations Piling driving 40-45 

Foundations General 40-26 

Abutments General 41-26 

Superstructures General 43-26 

Miscellaneous 49- 

Supplementary parts: 

Signs and sign posts General 50-26 

Guard rails General 52-26 

Curbs General 53-26 

Miscellaneous 59- 

Engineering and supervision : 

Supervisory engineering .... General 67-26 

Inspection General 68-26 

Miscellaneous 69- 

Administration : 

Engineering, departmental 97- 

Miscellaneous 99- 

For the purpose of obtaining costs in more detail than is given 
in the foregoing, both the class and operation codes are sus- 
ceptible of further divisions. In the following, divisions are made 
of the example chosen which are as complete as will generally 
be practical to use for highway cost keeping except in those 
cases where efficiency studies are desired. 

Cost Divisions 

Road part Operation Code 

Right of way: 

Preliminaries 00- 

Right-of-way surveys General 01-26 

Right-of-way plans General 02-26 

Real estate 03- 

Damages 04- 

Miscellaneous 09- 



COST KEEPING OF HIGHWAY CONSTRUCTION 239 

Grade and roadside: 

Cuts and embankments . . . .Excavating, common 10-17 

Cuts and embankments .... Excavating, borrow 10-16 

Cuts and embankments .... Drilling 10-14 

Cuts and embankments .... Blasting 10-03 

Cuts and embankments . . . .Loading 10-35 

Cuts and embankments . . . .Hauling 10-31 

Cuts and embankments . . . .Wasting materials 10-69 

Cuts and embankments .... Rolling 10-56 

Shoulders Rolling 11-56 

Shoulders Shaping 11-59 

Berms and slopes Trimming 12-66 

Berms and slopes Planting 12-48 

Miscellaneous Clearing 19-07 

Miscellaneous Grubbing 19-28 

Miscellaneous Blasting 19-03 

Roadway : 

Subgrade Shaping 20-59 

Subgrade Sprinkling 20-63 

Subgrade Rolling 20-56 

Base course Loading and hauling 22-36 

Base course Forming 22-25 

Base course Mixing 22-38 

Base course Placing 22-46 

Base course Shaping 22-59 

Cushion course General 26-26 

Top course Loading and hauling 27-36 

Top course Laying (brick) 27-34 

Top course. Rolling (brick) 27-56 

Top course Grouting 27-27 

Top course Curing concrete 27-11 

Miscellaneous Cleaning 29-06 

Ditches and drains: 

Ditches and gutters Excavating, common 30-17 

Ditches and gutters paved. . . Forming 31-25 

Ditches and gutters paved. . .Loading and hauling 31-36 

Ditches and gutters paved. . . Mixing and placing 31-39 

Ditches and gutters paved. . .Finishing 31-24 

Ditches and gutters paved. . . Curing concrete 31-11 

Tile drains Excavating, common 33-17 

Tile drains Laying 33-34 

Tile drains Loading and hauling 33-36 

Tile drains Tamping 33-65 

Tile drains Back filling 33-01 

Catch basins Excavating, common 34-17 

Catch basins Loading and hauling 34-36 

Catch basins Laying (brick) 34-34 



240 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Bridges and culverts: 

Foundations Cofferdaming 40-09 

Foundations Cribbing 40-10 

Foundations Excavating, common 40-17 

Foundations Excavating, wet 40-21 

Foundations Forming 40-25 

Foundations Loading and hauling 40- 

Foundations Pumping 40-51 

Foundations Pile driving: 40-45 

Foundations Mixing and placing (concrete). . . . 40-39 

Foundations Back rilling 41-01 

Abutments Loading and hauling 41-36 

Abutments. Laying (masonry) 41-34 

Abutments Pumping 41-51 

Abutments Quarrying (masonry) 41-52 

Piers and bents (Same operations as abutments). . 42- 

Superstructures Blacksmithing 43-02 

Superstructures Building false work 43-05 

Superstructures Curing concrete 43-11 

Superstructures Finishing 43-24 

Superstructures Forming 43-25 

Superstructures Loading and hauling 43-36 

Superstructures Mixing and placing (concrete). . . . 43-39 

Superstructures Placing steel 43-47 

Box culverts Excavating, common 44-17 

Box culverts Loading and hauling 44-36 

Box culverts Forming 44-25 

Box culverts Mixing and placing 44-39 

Box culverts Curing concrete 44-11 

Pipe culverts Back filling 45-01 

Pipe culverts Excavating, common 45-17 

Pipe culverts Forming (headwalls) 45-25 

Pipe culverts Laying (pipe) 45-34 

Pipe culverts Loading and hauling 45-36 

Pipe culverts Mixing and placing 45-39 

Miscellaneous Cleaning 49-06 

Supplementary parts : 

Signs and signposts Building 50-04 

Signs and signposts .Loading and hauling 50-36 

Signs and signposts Painting 50-43 

Monuments General 51-26 

Guardrails Building 52-04 

Guardrails Loading and hauling 52-36 

Guardrails Painting 52-43 

Curbs Back filling 53-01 

Curbs Curing concrete . 53-11 

Curbs Excavating, common 53-17 

Curbs Finishing 53-24 



COST KEEPING OF HIGHWAY CONSTRUCTION 241 

Curbs Forming 53-25 

Curbs Mixing and placing 53-39 

Riprap and revetments Loading and hauling 55-46 

Riprap and revetments .... Placing matirials 55-46 

Roadside treatment Clearing 56-07 

Roadside treatment Loading and hauling 56-36 

Roadside treatment Planting 56-48 

Roadside treatment Painting 56-43 

Engineering and supervision: 

Location and relocation 

surveys General 60-26 

Surveys for operations General 61-26 

Plans General. 62-26 

Specifications and contracts. . General 63-26 

Estimates General 64-26 

Expense of awards General 65-26 

Office expenses engineering . . General 66-26 

Supervisory engineering .... General 67-26 

Inspection General 68-26 

Miscellaneous 69- 

Plant and equipment: 

Quarries, pits, etc General 71-26 

Camp buildings and shelters . General 76-26 

Storage and transportation . General 77-26 

Miscellaneous Assembling 79-00 

Miscellaneous 79- 

Administration : 

Engineering 97- 

Miscellaneous 99- 

Recording Forms. — Standard forms, to record the daily- 
expenditures of labor, materials, and plant service, should be 
prepared for the use of the timekeepers or foremen responsible 
for reports. The use of the nondescript forms or blank books 
should not be permitted, as such practice will result in unreliable 
data, often estimated at the end of the day's work, or a jumble 
of meaningless figures. Forms to be used for recording field 
data should be reduced, if possible, to pocket size for the sake of 
convenience. Two such forms are suggested in this bulletin, 
the sheets being 4% in- wide by lO 1 ^ in. long. It is not expected 
that these forms will meet all the requirements for every system, 
but it is believed that they are correct in principle, and with 
slight modifications will be found applicable for any organization 
doing highway work. 

The forms designed and suggested herein are based upon and 
developed from the great number of various forms now in use in 

16 



242 CONSTRUCTION COST KEEPING AND MANAGEMENT 

highway work throughout the United States and Canada. The 
same form is used for labor and equipment operations, but an 
additional form is necessary for materials, as it would be awkward 
to make out individual sheets for each kind of material. The 
daily summary of costs, and the periodic and total summary cost 
sheets are included, to show the final disposition and use of the 
data collected on the daily record forms. The final summaries 
also will fulfill the purpose of a final record of the cost of any 
job, and can be published for the purpose of substantiating and 
justifying the amounts expended. 

Additional forms are necessary to record progress and character 
of the work by the supervising engineer, and the methods and 
amounts of payments made upon the work. 

The cost-recording forms are outlined and used as follows: 

Form No. 2 (Fig. 37) provided for 40 entries of men or equip- 
ment or both and their use on six classifications. The amount 
for each individual item can be given both in money and in total 
hours. 

This form shows that on Aug. 29, 1917, the foreman F. Smittie 
employed a gang of laborers numbered from 1 to 21; engineer, 
No. 4; rollers, No. 1, and No. 2; team, No. 2; guards Nos, 1 and 2; 
and waterboy, No. 2, on reconstruction work on the B. and W. 
Road, section 4. 

These codes show they were employed as follows : 

11-59 Grade and roadside, shoulders, shaping. 

23-06 Roadway, base course, cleaning. 

23-56 Roadway, base course, rolling. 

23-61 Roadway, base course, spreading. 

27-34 Roadway, top course, laying. 

27-56 Roadway, top course, rolling. 

Notes on the sheet show that four laborers were transferred to 
foreman Rosetta at 9 A.M. and a large part of the crew between 
4 and 4.30 P.M. 

The daily record of foreman Rosetta's crew (Fig. 38) shows on 
the same road a crew of 33 laborers, a water boy, roller, and 
engineer on classsifications — 

19-17 Grade and roadside, miscellaneous, excavating, common. 

22-56 Roadway, sub-base course, rolling. 

22-61 Roadway, sub-base course, spreading. 

23-61 Roadway, base course, spreading. 



COST KEEPING OF HIGHWAY CONSTRUCTION 



243 



DAILY TIME AND COST RECORD 

ROAD.. B..dc\V.. SECTION...-^...*-. .<^?//Z..DATE 

LOCATION... .#?.. RO$d. rfipfckR. 


LABOR 
OR 

EQUIPMENT 


TIME 


HRS. 


RATE 


TOTAL 

AMOUNT 


CODE 

//-S3 


CODE 

23-06 


CODE 

27-34 


ON 


OPF 


HRS. 


AMT. 


HRS 


AMT 


HRS 


AMT. 


F.Smiftie 


Z# 


fi0 






_4- 


40 




















Ldborer 1/ 




4.30 


5^ 


.375 


_J_ 


19 














W/fi 


3 


n 


1 2 


., 






. 


3 


19 














nuiiti 


3 


19 


1 3 


. 


«• 


„ 




3 


19 














mil 


1 


19 


1 4 


. 


. 


„ 


„ 


_3_ 


19 














Willi 


3 


IS 


\ S 


. 


« 


„ 




_£ 


t9 














wmk 


3 


>9 


U 


. 


. 


» 


„ 


3 


19 














mi 


3 


19 


Jb ] 7 


. 


, 






_£ 


19 














imuih 


3 


19 


"fe {<? 


, 


. 


„ 


„ 


3 


19 














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3 


19 


f& I 5 


» 


, 


„ 


„ 


3 


1.9 














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3 


13 


^ \io 


. 


. 






3 


19 














Ui 


3 


19 


£ /// 


. 








3 


13 














M 


3 


19 


"k 1 tf 




#(¥ 


8 




3 


00 


II 




75 


JL 




n 


w 


1 


to 


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„ 


„ 


3 


00 














WL 


3 


00 


\/* 


„ 


. 




„ 


_i 


00 














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3 


00 


w 




. 


„ 




3 


00 


m 


1 


88 


I 




V 


JL. 




is 


Af 




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9 




3 


37 














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3 


V 


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3 


37 


Willi 


3 


37 




















TO 


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6 


00 






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_-2L 


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6 


23 


r6 


' 


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6 


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[18 


„ 


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2 


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75 








1/ 




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19 




% 


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„ 




W 








II 




7S 








S 8/* 


„ 




n 


„ 




75 








II 




7S 








* Ma 






„ 


„ 




is 








JJ 




7S 








Engineer 4 




W0 


8 


.fio 


4 


00 


ill 


1 


50 








0L- 


2 


SO 


Roller I 




. 






_5_ 


00 


ill 


5 


00 














2 


.. 


. 






S 


00 














m 


S 


00 


Team 2 


10.00 


fi?<M 


2 




/ 


so 


l 




75 








/ 




75 


Guard 1 


700 


,«W 


9 




2 


80 




















2 


,. 


. 


9 




_Z 


80 




















Waterbov 2 




- 


9 






88 


Hal 


c 1 


in, 


e f 


7 1 


?o, 


:eH 


3 










TO 


TAL 








7 


?s 




3 


00 




8 


25 




M 


ix/i 


ty 


P/an 


U C 


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>n 


af 


4 


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G& 


L 


se 


?f 


<-o 


A 


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7 








































































































TOTAL 


83 


21 















Fig. 37. 



244 CONSTRUCTION COST KEEPING AND MANAGEMENT 



DAILY TIME AND COST RECORD 

ROAD..£.SzW.... SECTION. .-£ 8/23/J7.. DATE 

location.. On.. Road. -C.M.R. 


LABOR 
OR 

EQUIPMENT 


TIME 


HRS 


RATE 


TOTAL 


CODE. 

19-17 


CODE 

22-6/ 


CODE 

23-61 


ON 


OFF 


AMOUNT 


HRS 


AMT. 


HRS 


AMT. 


HRS 


AMT 


FRosetta 


M 


SCO 






s? 


75 




















Laborer22 


« 




9 


.JW 


■3 31 


IHII 


? 


75 


III 


/ 


1? 








23 




- 






j3 


37 


Ml 


2 


75 


III 


/ 


1? 








24 










3 


37 


nun 


2 


6? 


II 




IS 








-25 


■t 


« 


.. 




3 


37 


Will 


2 


62 


II 




75 








26 


* 


M 


. 




3 


37 


/Willi 


3 


37 














?7 










3 


37 


Mllll 


3 


37 














2fl 


„ 








3 


37 


mil 


3 


V 














29 


. 






. 


3 


37 


IHllHI 


3 


37 














.9» 




. 




. 


3 


37 


WWII 


3 


37 














31 


* 




■ 


. 


3 


37 


(Willi 


3 


37 














*% f/8 


ROC 




7 




2 


62 














mil 


? 


62 


^ 




„ 


„ 






2 


62 














mn 


2 


62 


{& 


120 


. 


. 


- 


, 


2 


62 


III 


1 


12 


III 


/ 


1? 


1 




37 


« i* 








- 


2 


62 


III 


I 


12 


III 


/ 


12 


1 




V 


•V, 


h? 


JO.00 




(5 


„ 


2 


?5 


mil 


? 


75 


TOT/ 


LS 


% 








■ti!* 


33 


* 






. 


2 


25 


IH1I 


2 


25 














E^u 


., 


, 


. 


- 


2 


25 


Ml 


2 


25 














3 (,, 


2.00 




J 


, 


1 


12 


in 


1 


12 














I" 


400 




/ 


« 




37 


/ 




37 














I 


12 


„ 






„ 




37 


/ 




37 
















13 


„ 


„ 








37 


/ 




37 














^ 


14 




. 


- 


» 




37 


/ 




37 














i? ^ 


„ 


„ 


, 


. 




37 


/ 




37 














viS 


1 


430 


,, 


* 


„ 




18 


'A 




18 














>*o 


?. 






„ 






18 


'/z 




18 














"? V- 5 






, 






13 


•k 




18 


















. 




„ 




13 


</z 




18 














£L 




. 


, 


. 




18 


Vz 




18 














r /* 


„ 




., 


., 




18 


'A 




'8 














1 7 


„ 






., 




18 


>/z 




18 














* a 


. 


., 


. 






18 


ft 




18 














I 5 


„ 


„ 


« 


„ 




18 


'A. 




18 














\io 


„ 


„ 


- 


., 




(8 


'/z 




18 


22 


-s 


6 








Engineer 2 






tf 


66(? 


_&. 


no 


mi 


3 


93 


/ 




67 








Roller 3 






£ 


.833 


S 


00 


IHi 


4- 


<7 


/ 




83 




























TOTA 


- 1 


50 








Waterbov2 












57 


t/& 


f 


% 


7e V 


'ill 


1 1 


5/n/i 


-fi 


5 


TOTAL 


63 


32 


5/ 


22 






S 


99 



Fig. 38. 



COST KEEPING OF HIGHWAY CONSTRUCTION 



245 



DAILY TIME AND COST RECORD 

KOAD..t?ai/te,Jg. SECTION..^. .._ _...<££-^/Z.DATE 

LOCATION..^?../??^ , „ C.-M.Rr 


LABOR 
OR 

EQUIPMENT 


TIME 


HRS 


RATE 


TOTAL 

AMOUNT 


CODE 

//-SS 


CODE 

20-S9 


CODE 




ON 


OFF 


HRS 


AMT. 


HRSl 


AMT. 


HRS. 


AMT. 


A8 


700 


8.00 


to 


62S 


6 


?£ 




















Laborer 174- 


„ 


8.30 


I'A 


.37S 




55 


I'/z 




SS 


Fir 


?</ 










187 


93C 


230 


4 


„ 


_L 


SO 


mi 


_L 


so 


Fir 


M> 










w 


,. 


,, 


4 


.. 


I 


so 


mi 


i 


so 


Sen 


t f 


'To 


rfrt 


'US 


e 


;*a 




fOO 


7i 


„ 


2 


no 








Willi 


? 


?<? 








($7 




Z30 


4 


n 


/ 


TO 


//// 


_z 


so 


Sen 


L tv 


To 


ift/c 


iJSt 




Z9.9 




$00 


7% 


lt 


2 


50 








Wit? 


2 


10 








448 


ISO 




in 


•„ 


3 


7.S 








9IIXI 


_J_ 


75 








4/4 


EM 




fl 


^ 


3 


3 7 


Willi 


_J. 


$7 














43/ 


700 




10 


n 


3 


7.S 








mnm 


_& 


75 








432 




m 


10 




3 


75 








mi im 


3 


75 








437 


11.00 









2 


?S 


mil 


_z 


?s 














439 


700 




m 


„ 


3 


7.T 








huni 


3 


75 








440 


„ 




(0 




3 


75 








MINI 


3 


75 








44* 




, 


10 




3 


7S 


IWlttt 


3 


7S 














' 454 


» 


„ 


10 


,. 


3 


75 


WW 


3 


75 














465 


„ 


, 


'0 


„ 


3 


75 


01 


2 


?S 


mi 


/ 


SO 








469 


„ 


„ 


to 




3 


75 


mm. 


3 


75 














470 


„ 


„ 


fO 


„ 


3 


75 





1 


87 


/tit 


/ 


88 








475 






/o 


„ 


3 


75 


MM 


7 


75 














477 


., 


%M 


I'/z 


,. 




ss 


I'/z 




SS 


Sen) 


'to 


Sit 


imS 


w« 


li. 


47 S 


, t 


600 


10 




3 


7* 








wot 


3 


7S 








473 


tf 




'0 


„ 




75 


m//w 


.3 


7S 














484 




ft,3(, 


/"r 


„ 




ss 


I'/z 




SS 


\ 












4SS 






/'> 






^5 


I'/z 




IS 


ISe 


nr 


to 


Stec 


773 




4fif> 


H 




l'/ ? 






%<; 


I'/z 




*5 


\s>. 


ov 


el 


£ 






487 


„ 


9.30 


2? ? 






93 


ll'/z 




93 


Fir 


*d 










49? 


.. 


1^0 


1'/? 






rs 


I'/z 




ss 


Sent 


fvS 


tea 


•nSh 


we 


'2 


son 


,. 


4 on 


8 




3 


on 








mini 


3 


00 








sm 


. 


foO 


HI 


, 




ss 


I'/z 




rs 


Sent 


toS 


fas 


■nSh 


ve, 


'2 


sot, 




for. 


in 


„ 


3 


j*> 


Car 


rirt 


no 


Wat 


■er 










532 




„ 


10 


„ 


3 


7S 


IHIIHI 


3 


75 














568 


/loo 


. 







2 


?s 


mi 


7 


7S 














5.99 




I?M 


1 






37 


I 




37 


Sen^ 


tv 


Toe 


/Hot, 


■se 




* 195 


. 


?V 


l'/f 






IS 








t'A 




SS 


Sen 
Too/ 




) 


Team 21 


7.00 


l?tt, 


5 


■ flfl 


4 


■10 








IHI 


..4. 


00 








22 




, 


& 




4 


00 








rut 


4 


10 








Qrac/er 1 - 


« 


s 


.SO 


2 


SO 








ML 


2 


so 








TOTAL 


39 


€7 


44 


14 


45*3 







Fig. 39. 



246 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Laborers were received three times during the day from foreman 
Smittie and once from foreman Carter. 

In Fig. 39 is shown the work of a large crew, but on only two 
operations. A number of changes in the crew will be observed. 
Only 15 men out of a total of 36 employed worked the full day 
with foreman A8. 

Material and Supplies. — The form for materials and supplies 
(Fig. 40) is the same size as that for labor and equipment and 
may be carried by the timekeeper or foreman in the same book 
or binder with the other form. The material form is for 1 
day only and 12 different materials may be recorded on a single 
sheet. The sheet shows distribution as follows: 





wmAsUarxl^riffn DAILY RECORD OF MATERIALS AND SUPPLIES **tr**3? -J™™" 


KIND 


UNIT 


RATE 


CODES. UNITS, AND AMOUNTS 




4-3-33 


41-39 


4-3-2S 


of-3-4-- 






UNITS 


AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 




AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 


Cement 


Ran 


.47 


ISO 


JXL 


V 


/o 


4 


~>o 


























/umber 


ft 


10.00 














/.? 


3C 


m 




















Mplk 


Ifl 


.035 














20 




10 




















Wire 


Ih 


.035 














10 




if 


8 




ffi 














Gasoline 


fat, 


.20 


s 


1 


on 


1 




70 


























Sanri 


ex 


.60 


22 


13 


70 


2 


1 


?( 


























Steef 


ih, 


.03 




















7800 


?M 


0( 














nil 










to 








































































































































































































TOTAL AMOUNTS 




84 


86 




6 


10 




37 


OS 




234 


2S 














WHERE USED 


West Span 


EastAbuiment 


WesfSpan 


3Nss+5pans 







Fig. 40. 



For Operation 43-39, Mixing and Placing Superstructure 

150 bags eement, at $0.47 $70.50 

5 gallons gasoline, at $0 . 20 1 . 00 

22 cubic yards sand, at $0.60 13.20 

Oil 10 

Total for operation (used on west span) 84 . 80 



For Operation 41-39, Mixing and Placing Abutment 

10 bags cement, at $0. 47 $4. 70 

1 gallon gasoline, at $0 . 20 .20 

2 cubic yards sand, at $0.60 1.20 

Total for operation (used on east abutment) 6. 10 



COST KEEPING OF HIGHWAY CONSTRUCTION 247 

For operation 43-25, Forming Superstructure 

1,200 ft B. M lumber, at $0.03 $36.00 

20 pounds nails, at $0. 035 .70 

10 pounds wire, at $0.035 35 

Total for operation (used on west span) 37 . 05 

For Operation 43-47, Superstructure, Placing Steel 

8 pounds wire, at $0.035 $0.28 

7,800 pounds steel, at $0. 03 234 . 00 

Total for operation (used on 3 west spans) 234 . 28 

Daily Report of Costs. — When the records of the amount of 
labor, the service of equipment, and the expenditures of materials 
have been completed the data for arriving at unit costs are at 
hand. For convenience in bringing together these three ele- 
ments of cost, a form has been drawn up called the "Daily report 
of costs." This is not for field use and is 8^ in. wide and 13^ in. 
long. The unit costs are arrived at by setting down against the 
code number all labor equipment and material charges in detail. 
These are added together and the sum is divided by the units of 
work completed as estimated by the foreman. The units com- 
pleted are checked against the engineer's monthly estimate and 
should not show a very great discrepancy, say not over 5% at 
the outside. 

Sample labor and equipment and materials forms for work of 
constructing a field stone base course of a road and the daily 
report of costs form filled out from these are shown on pages 249, 
250 and 251. 

These three forms compose the entire set needed to record the 
field operations and compute unit costs of such operations. 

Immediate Use of Cost Data. — When the daily reports of costs 
reach the official responsible for the work he can readily prepare 
a graph (Fig. 41) showing both the estimated unit cost and the 
actual daily unit cost in convenient form. Any wide divergence 
between the estimated and actual costs is apparent at once and 
can be investigated. The horizontal axis of the graph in this 
case is divided to show the days of the month. The vertical 
axis is divided to show the unit cost of the work. Some such 
chart will show effect of conditions upon the work. 



248 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Final Disposition of Cost Data. — It has been pointed out that 
the objects of a cost-keeping system are two. First, to show the 
efficiency of performance and facilitate the reduction of costs, 
and, second, to supply data which may be used for the intelligent 
estimating of future improvements and to furnish materials for 
published reports. 

Highway work obviously is a public improvement paid for 
entirely from funds derived from the public revenue. Ultimately, 
then, the taxpayer pays for all of this improvement and is entitled 
to a full and detailed account of how this money was expended. 
Again, public records of this kind are all that remain to be used 
for the comparing of the efficiency of one administration with that 
of another. It would appear, therefore, to be a step in the direc- 

70 



eo 
































so 












/ 


N 




























~A 












ESTIMATED COST 




an 












] 
















/ 


Very 


hot 








^ 


ACTUA/ _ 


££. 














?n 
































10 

































































JUNE 



Black in charge \<- 



8 9 10 

-Smith in charge 



Fig. 41. — Graph showing estimated and actual costs. 



tion of good judgment for all those in charge of public improve- 
ments to adopt some simple system of cost keeping such as is 
outlined herein, which could be used both as an aid to present 
efficiency and as a complete report of the ability of the officials 
in charge to get the most for the public funds. 

For the purpose of presenting in concise form the costs and also 
to show the progress being made during the period of construction 
the form shown on page 252, " Report of Progress and Cost," 
is suggested. The costs which comprise this report may be com- 
piled from daily reports. Such compilation may be made from 
day to day on a form similar to the one shown on page 253. 
Where the cost data are derived in greater detail than is provided 
for by this form, the "Cost Compilation Form " may be arranged 
in several sheets. 



COST KEEPING OF HIGHWAY CONSTRUCTION 



249 



DAILY TIME AND COST RECORD 

RQA0../fcute.2 SECTION <4 &/?s/<7.. DATE 

location. 40+7$. tQ . 45+00 C.-KArft-. 


LABOR 
OR 

EQUIPMENT 


TIME 


HRS 


RATE 


TOTAL 


CODE 

23-34 


CODE 

20-SS 


code 
23-12 


ON 


OFF 


AMC 




UNI 


HRS 


AMT. 


HRS. 


AMT 


HRS. 


AMT. 


FWauoh 


700 


&Q0 


10 


.JS 


_z 


$Q 




















LaborerS92 


., 




H 


.417 


_& 


1? 


IHIIHI 


4 


IZ 














601 


„ 


. 






J&_ 


1? 


BILL 


? 


17 








//// 


/ 


65 


610 


. 


> 




, 


4 


12 


m 


2 


06 








mi 


2 


06 


S90 


■ 




- 


. 


_A_ 


1? 


M 


? 


Of 








Ml 


? 


06 


589 


„ 


„ 


„ 


„ 


A. 


12 


/// 


/ 


?4 


Ill 


_J_ 


74 


ML 


1 


H 


533 




„ 


. 


„ 


4 


12 


Ml 


2 


06 








m 


2 


06 


&6 


3.00 


„ 


8 


. 


3 


30 


Ml 


2 


Qb 


1/1 


1 


24 








48/ 


I0.0C 




7 


. 


_z_ 


68 


IHtl 


? 


47 


/ 




41 








474 


m 


n 


10 


. 


JL 


/? 


W/IHI 


4 


12 














473 




„ 


, 


„ 


_A. 


12 


Will 


3 


30 








ii 




82 


46 7 


., 


« 


, 


. 


4 


17 


IH/J/I 


3 


30 








ii 




82 


466 


. 


. 


. 


. 


4 


12 


Mill 


3 


30 


II 




82 








422 


im 


, 


7 


. 


2 


88 


mm 


2 


88 
























707. 


1L 


86 


35 


44 




























































JL] 


-6 


9 














420 


7.00 


6,00 


10 


+12 


_4_ 


12 


mi/ 


2 


17 


III 


1 


24 


i 




rrV 


42S 


.. 


. 




m 


f* 


IZ 


mini 


3 


30 


II 




82 


















rvn 


AL 


14 


■5 


77 


14 


5 


V 


28 


11 


SI 
















23 


-5 


6 


2 


3< 


»/ 








Team 9 


TM 


$-00 


(0 


.80 


8 


00 








minu 


8 


00 








12 








- 


8 


00 








IHIIHt 


8 


00 








IS 


„ 


. 




- 


8 


00 








immi 


8 


00 








16 


, 


. 




, 


8 


00 








minu 


8 


00 








17 


. 


, 




. 


8 


00 








MIIH) 


a 


00 








ia 


. 


. 




. 


8 


00 








M 


a 


00 








23 


„ 


. 




„ 


8 


00 








IHIIH 


8 


00 








Vbterbov 115 




. 




.275 


_Z_ 


75 














i 






enqineer/6S 


m 


„ 




.625 


_£ 


25 


MM 


6 


25 














Roller 13 




Day 






8 


00 


Dax_ 


8 


00 














Team S 


8.0C 


m 


9 


■ fiQ 


_z 


20 








mm 


7 


?Q 








19 


. 




. 




7 


20 








Willi) 


7 


w 








21 


„ 


. 


. 


„ 


7 


20 








/Willi 


7 


20 








25 


. 


. 


. 


. 


7 


20 








Mill) 


7 


20 








30 


, 


, 


» 


. ' 


7 


20 








mt 


7 


70 








3 


goo 


300 


/ 


. 


\2_ 


80 


; / 




80 
























TV7 


AL 


II 


IS 


05 


IIS 


92 


00 








TOTAL 


ITS 


80 















Fig. 42. 



250 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The "Final Cost Summary" shown on page 254 is for the pur- 
pose of bringing together all expenditures involved and all units 
of work done, and to show unit costs, total cost of parts, per cent 
of cost by parts, and total cost of the entire improvement. 

The daily time and cost record of foreman Waugh's crew (Fig. 
42) shows: 

86 hr. labor on code 23-34 (laying base course) $35 . 44 

14 hr. labor on code 11-59 (shaping shoulders 5 . 77 

14 hr. labor on code 20-59 (shaping sub-grade) 5 . 77 

28 hr. labor on code 23-12 (crushing base course) 11 .52 

10 hr. labor, 1 hr. team hire on code 23-56 (rolling base course) . 15 . 05 

115 hr. team hire on code 23-31 (hauling base course) 92.00 





R oAo....«^. DA , LY record OF MATERIALS AND SUPPLIES «*W*--™«« 

section.^ *nk..mm. CM&-. 


KIND 1 UNIT 




CODES. UNITS. AND AMOUNTS 


RATE 


23-34 


23-S6 










UNITS 


AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 


UNITS 


AMOUNT 


FldShmeXcY. j .2S 


87 


?l 


7-r 
































C.nal VTt>n . I 4-.00 








.zs 


/ 


00 
































































1 








































1 








































1 








































1 








































1 




















































































































1 








































i 








































TOTAL AMOUNTS 




21 


*fl 




/ 


00 
























WHERE USED. 


43i75'h4l+S0 


4S+OOto4/H)C 











Fig. 43. 



The daily record of materials and supplies (Fig. 43) shows : 

Expenditures for 87 cu. yd. fired stone on code 23-34 (laying base 

course) $21.75 

One-quarter ton coal on code 23-56 (rolling base course) 1 . 00 



These data are combined and arranged on the daily 
report of costs form (Fig. 44) so as to make possible the 
ready determination of unit costs. In this case no indirect 
labor cost is charged to equipment. Teams were used only for 
hauling and were required to make a certain number of trips 
per day. 

The amount of work done was reported to the superintendent 
by the engineer in charge of this division of the work. 



COST KEEPING OF HIGHWAY CONSTRUCTION 



251 




252 CONSTRUCTION COST KEEPING AND MANAGEMENT 






p£ 



&5 



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O 4> 





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coooo 
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1011)10000 


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m 




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CN 


OOHCS COIN 


<NrH©CO 




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COST KEEPING OF HIGHWAY CONSTRUCTION 255 

Definitions of Road Operation Terms. — In road work it is not 
uncommon to find that the same operations are designated by 
different terms in different sections of the country. It has been 
thought advisable, therefore, to define briefly the processes 
which should be included by the cost keeper under each operation. 
Some of these operations will be found to overlap somewhat under 
certain conditions. This slight overlapping, however, seems 
preferable to the present ambiguity in the meaning of many 
of our road terms. Adherence to the following definitions will 
serve, therefore, to make such cost data as are collected more 
nearly comparable, regardless of locality. The several opera- 
tions are defined in terms of the processes which they include. 

Assembling. — Shall include all bringing together or collecting of tools and 
equipment, setting up of machinery, portable shacks, and all other struc- 
tures where the parts are delivered "knocked down" and require only 
bolting or riveting ogether. 

Back Filling. — Shall include all processes of refilling excavations or filling 
against the back of abutments, walls, etc. 

Blacksmithing. — Shall include all processes of working or shaping metals, 
except riveting, and shall include also such work in repairing the metal 
parts of machinery and equipment. 

Blasting. — Shall include all methods of rending or loosening of rock, earth, 
or other material with an explosive. 

Building. — Shall include the making, erecting, and establishing of buildings, 
structures, or parts, except bridges or portable structures delivered cut to 
fit. 

Building False Work. — Shall include the building or erecting of all temporary 
supports and bracing necessary for the erection of structures. 

Cleaning. — Shall include all removal of dirt or debris by any means from the 

■ surfaces of roadways or from ditches, drains, culverts, etc , and shall in- 
clude the sweeping of all road surfaces. It shall be applied also to the 
operations necessary to remove deleterious matter or coatings from the 
surfaces of such structures as bridges, buildings, guardrails, etc. 

Clearing. — Shall include the freeing of the roadway and roadside of all 
vegetation or incumbrances. 

Clearing and Grubbing. — Shall include in addition to clearing, as denned 
above, the removal and disposal of stumps. 

Coffer damming. — Shall include only the building of cofferdams. 

Cribbing. — Shall include the building of all kinds*of timber cribs to retain or 
sustain earth work. 

Curing Concrete, — Shall include the careful protection and slow drying of 
concrete, to prevent cracking or injury of any kind until the concrete has 
hardened. 

Crushing. — Shall include all reducing of stone or other material to small 
particles by pounding or squeezing, whether the work be done by machine 
or hand. 



256 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Dragging. — Shall include the smoothing of a roadway surface or the shaping 

and partial compacting of road courses with a road drag. 
Drilling. — Shall include the piercing or boring of any material, as iron or 

rock, with drills operated by hand or driven by power. 
Drilling and Blasting. — Shall include, in addition to the drilling, the loading 

of the holes with an explosive and the detonation of the explosive charge. 
Excavating. — Shall include the grading of the roadway, ditches, and slopes, 

and also the hollowing out by cutting or digging of all excavations for 

drainage structures. 
Filling Ruts. — This operation needs no explanation. 
Filling Washouts. — This operation needs no explanation. 
Finishing. — Shall include all other work necessary to complete a road or part 

of a roadway. 
Forming. — Shall include the building of all forms for concrete work and the 

removal of the same. 
General. — Shall include all charges impossible to allocate directly as belong- 
ing to any other operation in the table, or as a summary of operations on 

particular posts when desired. 
Grouting. — Shall include all filling out and finishing of any work with a thin 

watery cement or cement and sand mixture, as the grouting of brick, 

pavements, etc. 
Grubbing. — Shall include the removal of stumps and roots. 
Guarding. — Shall include all charges for watchmen, barriers, signs, and 

warning lights during the period that the road is being constructed or 

repaired. 
Harrowing.— Shall include all methods of breaking up clods of material on 

the road or mixing with harrows the materials of which the road is to be 

made. It differs from loosening. 
Hauling. — Shall include the transportation of materials or equipment. 
Heating. — Shall include all processes of raising the temperatures of materials 

by the application of heat. 
Laying. — Shall include the coating, spreading over, or covering any roadway 

course or road surface with any material, the placing in definite position 

of similar individual pieces of prepared material, or the constructing of a 

roadway course. 
Loading. — Shall include the placing of any object or material in a conveyance. 
Loading and Hauling. — Shall include a combination of loading and hauling, 

both of which have been defined. 
Loosening. — Shall include the breaking up of a dense, close mass, as an old 

road surface, into detailed particles with picks, scarifiers, or any other 

equipment. 
Mixing. — Shall include all blending of materials into masses by stirring or 

turning, such as the mixing of concrete, water, aggregate, etc., but shall not 

include harrowing. 
Mixing and Placing. — Shall include, in addition to mixing, the locating of the 

mixed material in a desired position. 
Moving. — Shall include all operations necessary for shifting or changing the 

position of any object. Thus it is a general term and may include a 

number of specific operations. 



COST KEEPING OF HIGHWAY CONSTRUCTION 257 

Operating. — Shall include the continuing in activitj^ of any machinery. 
Oiling. — Shall include the spraying or coating of a road surface with liquid 

bituminous matter. 
Painting. — Shall include the covering of any object with a coating of a 

prepared pigment; also shall include whitewashing. 
Patroling. — Shall include the continuous services of patrolmen repairing 

and maintaining a designated stretch of road. 
Pile Driving. — Shall include the placing of piles or sheathing by means of a 

driving hammer. 
Placing. — Shall include the locating in a desired position of any object or 

material. 
Planting. — Shall include the putting or placing of any sod, seed, shrub, or 

tree for growth. 
Plumbing. — Shall include the preparation and placing of pipes, pumps, etc. 

required to deliver water to the road. 
Plowing. — Shall include the loosening of any material by the use of a plow. 
Pumping. — Shall include the lifting or driving of any material by pumps. 
Quarrying. — Shall include the taking out of stone from an excavation or 

quarry. 
Removing Snow. — Requires no explanation. 
Repairing. — Shall include all acts of returning to a sound state any road part 

where the work done is not extensive enough to be classified as recon- 
struction. 
Riveting. — Shall include the uniting of two or more pieces with rivets and the 

heading of the rivets. 
Rolling. — Shall include all compressing of roadway or surface material with a 

hand, horse, or power roller. 
Scarifying. — Shall include the loosening or stirring up of the surface or the 

breaking of a bond of the road. This is almost synonymous with loosening. 
Screening. — Shall include the removal of all undesirable particles from any 

material by passing it through or over a screen, or both. 
Shaping. — Shall include all processes of bringing road parts as subgrade, 

shoulders and courses to a regular form of section. 
Spreading. — Shall include the scattering or distributing of any materials 

over a large surface in order to form a coating or layer of uniform depth. 
Sprinkling. — Shall include the distribution of water, in a fine coat over a 

surface. 
Stripping. — Shall include all removing or taking off the cover or burden from 

gravel pits or quarries. 
Trimming. — Shall include the cutting off of small quantities of excavation 

to make the roadway or roadside conform to a regular outline or section. 
Washing.— Shall include the removal of any undesirable matter from a 

material by use of water. 
Washing and Screening. — Shall include, in addition to washing, the proc- 
esses explained under screening. 
Wasting Material. — Shall include all depositing on a dump or spoil bank of 

excavated materials that can not be used in embankment. 
Waterproofing. — Shall include all protecting from water of concrete walls, 

etc., by the use of bituminous or any other material. 
17 



258 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Working on Joints. — Shall include all the labor made necessary by the 
introduction of expansion or contraction joints, natural or artificial, and 
also the openings between regular sets, as the joints in a brick roadway. 

Wrecking. — Shall include the tearing down or destroying of any structures. 

References. — The authors acknowledge their indebtedness to 
the following sources of information : 

The cost-account systems of the following State highway departments: 
Arizona, Illinois, Maryland, Oregon, Pennsylvania, and Wisconsin; "Effi- 
cient Cost Keeping," by E. St. Elmo Lewis; "Efficiency," by Harrington 
Emerson; "Cost Data," by H. P. Gillette; "Cost-Keeping and Scientific 
Management," by H. A. Evans; "Cost Records for Executives as a Means 
of Plant Control," by B. A. Franklin; "Cost Keeping and Management 
Engineering," by H. P. Gillette and R. T. Dana; "Cost Accounts," by 
L. W. Hawkins; "Psychology and Industrial Efficiency," by Hugo Munster- 
berg; "Cost Accounts," by J. L. Nicholson; "The Principles of Scientific 
Management," by Frederick W. Taylor; "Cost Accounting," by J. R. 
Wildman; "Modern Accounting," by H. R. Hatfield; "The Handbook of 
Municipal Accounting," by the Bureau of Municipal Research; The Cost- 
Accounting System of the Ontario Highway Department; the Cost- Account- 
ing System used by the Bureau of Public Works of the Philippine Islands; 
an article on "Cost Accounting," by Capt. Godfrey, and the subsequent 
discussions on the subject in the Army Engineers' Magazine; "Memoirs of 
Army Engineers;" and in addition the Study of Cost-Accounting Systems 
in use in many counties, cities, and towns in the United States, and the 
chapter on "Cost Finding" in Volume XI of the Alexander Hamilton 
Institute, and the Transactions of the American Society of Civil Engineers. 



CHAPTER VII 
BOOKKEEPING FOR SMALL CONTRACTORS 

Simplicity Essential. — Most articles and books describe com- 
plex bookkeeping systems which are impossible for the average 
contractor who must depend on a moderate-priced bookkeeper, 
or even a stenographer with a slight knowledge of bookkeep- 
ing. While today most firms in this class are still able to 
do business with poor records because their small awards are 
obtained from friendly sources or through "pull" of some kind, 
competition is day by day making inroads on this field. That 
these firms are aware of the danger of their position is clearly 
indicated by the increased number of inquiries received by ac- 
countants and engineering cost specialists regarding simple ac- 
counting systems. It is with these contractors in mind that this 
chapter is written. 

Let us suppose that the office force of a small contracting 
firm largely engaged in building work, for which we are about 
to design a bookkeeping system is made up of two owners, one 
of whom acts as Manager and the other as Chief Engineer, the 
former attending to the business end and the latter the construc- 
tion end, supervising the designing and estimating and acting 
as superintendent; an estimator who also does whatever drafting 
there may be; a stenographer who looks after the correspondence, 
the files and the telephone; a bookkeeper who is responsible for 
the records; and an office boy. 

With such a limited force available for the work, it is clear 
that simplicity must be the keynote, even if the results obtained 
are not theoretically accurate at some points. 

Partnership agreements often contain a clause which states 
that each partner is to receive a salary, naming the amounts. 
Although this makes no difference in the total amount received 
from the business by each partner, it aids in making up the cost 
records; and we will assume that such an agreement has been 
entered into by the partners of the business under consideration. 

259 



260 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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BOOKKEEPING FOR SMALL CONTRACTORS 261 

For the sake of clearness we will first outline the various 
accounts to be kept, then discuss the methods of gathering the 
data and finally describe the method of distribution. 

Fundamental Divisions of Cost. — In order to make the dis- 
cussion clear, Chart No. 1 has been inserted. The subdivisions 
shown are only illustrative, and are not complete, since it would 
be futile to attempt to make a complete outline that would apply 
to any contracting firm. Keeping books is writing the history 
of business transactions; hence, it is obvious that no outline of 
the "history " can be made until the " events " are known. Even 
though two firms are in the same line of work, these "events" 
are never of quite the same nature in both concerns. Therefore, 
it is clear that before an outline of the records of a concern can 
be made, that particular concern must be studied to learn the 
nature of all its transactions. For this reason no general dis- 
cussion of the methods of keeping accounts for any line of busi- 
ness can hope to be more than thoroughly suggestive. 

Every source of expense to a contracting business contributes 
to the total cost of the contracts carried by the firm. A certain 
proportion of the Office Rent, the Legal Expenses in connection 
with law suits, the cost of making unsuccessful tenders, etc., are 
just as much a part of the cost as wages paid to carpenters and 
bricklayers. To allocate these various costs seems a difficult 
problem, but the first step is simple, for each item can be 
readily classified under one of the following two divisions: 

1. Direct Expense. 

2. Overhead Expense. 

Direct Expense includes all expenditures that pertain to only 
one contract, and that can be charged to that contract without 
subdivision or apportionment. 

Overhead Expense includes all expenditures that pertain to 
all the contracts carried, and that cannot be charged to the indi- 
viduals contracts without subdivision or apportionment. 

Analysis of Direct Expense Account. — The Direct-expense 
Account is divided into two parts: 

1. Field Expense. 

2. Sub-Contract Expense. 

Field Expense includes all items which can be directly charged 
to the work in the field. 

Sub-Contract Expense includes all amounts paid for work 
done by sub-contractors. 



262 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Under Field Expense we have four subdivisions: 

1. Labor. 

2. Materials. 

3. Supplies. 

4. Miscellaneous. 

All expense for labor (except when sub-contracted) employed 
in the field is charged under Labor. 

Expenditures for materials which are found in the completed 
structure, and which are paid for according to the contract, 
are charged under Materials; e.g., Cement, Sand, Crushed Stone, 
Bricks, etc. 

Supplies include all such items of material as are necessary 
to the carrying on of the work, but which are partially, or wholly, 
destroyed in the process of construction; e.g., Oil, Waste, Coal, 
Rope, Hose, etc. 

General items of expense which do not come under any of the 
first three classifications, but which can be directly charged to the 
Field Account of a contract, come under Miscellaneous; e.g., 
Plant Rental, Plant Depreciation, Telephone and Telegraph, 
Postage, etc. 

Analysis of Overhead Expense Account. — There are two 
main divisions under Overhead Expense: 

1. Office Expense. 

2. General Miscellaneous Expense. 

Office Expense includes all items which cannot be charged 
directly against the field and which are due to maintaining an 
office. 

Three subdivisions can be made under Office Expense, namely: 

1. Labor. 

2. Supplies. 

3. Miscellaneous. 

All expenses incurred for Labor through the office force, in- 
cluding everybody housed in the office from the Manager down 
to the Office Boy, are classed under Office Labor. In the case 
of a large business it will pay to subdivide this account rather 
minutely, the degree of analysis depending upon the magnitude 
of the business. In a small firm, where a man is called upon 
to do several classes of work, time of the individuals will have 
to be divided and charged to several classifications. This mat- 
ter will be taken up again later. 



BOOKKEEPING FOR SMALL CONTRACTORS 263 

Supplies include all expenditures for materials used by the 
office force, and include such items as Engineer's Supplies, Book- 
keeper's Supplies, Stenographer's Supplies, etc. 

Expenditures which are due to the maintenance of the office 
and which cannot be classed under either Labor or Supplies, be- 
ing general in nature, are charged under Miscellaneous Expense. 

General Miscellaneous Expense includes all expenditures 
which are so general in nature that it is impossible to charge 
them against either the Field or the Office and which are due to 
the maintenance of the business in general. 

The various items of the subdivisions under Field, Sub- 
Contract and Office Expense are divided into three classes: 

1. Management Costs. 

2. Maintenance and Incidental Costs. 

3. Direct Costs. 

Management Costs include all expenditures for labor doing 
work of a managerial nature, involving discretionary powers. 

Maintenance and Incidental Costs include all expenditures 
incurred by the Office and Field for labor, material, supplies and 
miscellaneous items necessary to the maintenance of the business, 
but incidental as regards the actual construction. 

Direct Costs include all expenditures for labor, materials, 
supplies and sub-contracts directly necessary in carrying out the 
main contract. 

Attention is called to the fact that the Total Expenditures 
are equal to the Total Construction Costs. Hence, when unit 
costs are worked out, their total should check reasonably close 
with the difference between Total Expenditures and sub-Con- 
tracts, or they are too much in error to be of use. Just what 
"reasonably close" means depends on the class of work and on 
the elaborateness of the system of accounts, which in turn 
depends on the size of the business. On one large contract the 
total of the unit costs as made up from distributions checked 
within 1 % of the costs according to the books. This work was 
done by a large firm with a newly installed cost department. 

Gathering Data. — Field Labor data for Field Labor expense 
come weekly from the Timekeeper in the form of the Weekly 
Pay Roll. Form I is that used for the Construction Labor. 
For Field Management and Incidental Labor the same form is 
used, with the exception that the words printed at the heads of 
the sheets are the names of those accounts. 



264 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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Form I. 



BOOKKEEPING FOR SMALL CONTRACTORS 



265 



It will be noted that the week ends on Thursday night. This 
is to give the Timekeeper Friday and Saturday in which to make 
up his accounts and get his money ready for payment on Satur- 
day night. Anyone who has been through those week-end 
periods knows that this is not allowing any too much time. 

The men are listed according to trades, and the total amount 
paid for the week to each trade is entered in the "Trade Total" 
column on the line opposite the last name in that list. When 
starting to list a trade on a sheet partly filled, take a new sheet 
if there is not room for the whole trade in the remaining space. 



Contract No.. 



115 



P. R. V. No. 



Weekly Pay Roll Voucher 



Class of Work ?I^}^2 e L 

Name Chas. Glass No _ 



Date.....-/?":..?.. 



510 



.190.. 



Fri. 


Sat. 


Sun. 


Mon. 


Tues. 


Wed. 


Thur. 


Total 
Hours 


Rate 


Amount 


8 


4 


— 


7 




— 


19 


0.55 


10 


45 



-DOLLARS 



Received of the REAL ESTATE CONSTRUCTION COMPANY.. 

" " "lOO 

Chas. Glass 

Workman's Signature 

Correct Jj?™?J.J.:..?.™fk h . 

Time Keeper 

Approved ^r.A.M"" 75 . 

Superintendent 



Form II. 



When a man is discharged and paid during the week a voucher 
such as shown by Form II should be obtained and the voucher 
number entered in the "Remarks" column of the weekly pay 
roll. See Form II. 

All of these forms should be made up into books of conven- 
ient size with alternate pages printed on thin paper, and a 
carbon sheet used to make a copy on the thin sheets. The 
original sheet is perforated near the binding so that it can be 
readily torn out and forwarded to the Office. A copy of all 
records is thus left in the book for reference on the work. 



266 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Later, under the discussion of distribution, the further handling 
of these data will be taken up. 

Office Labor. — The time of the owner who attends to the 
business end will be divided between soliciting new business, pur- 
chasing materials, interviews with owners and architects, legal 
matters and various other things too numerous to mention. To 
be able to tell just how much each of these items costs the busi- 
ness might be very interesting, but the value of such data would 
not justify its expense and trouble in collecting. Hence, his 
salary will be charged each month without being analyzed. 

In the case of the other owner it would seem advisable to 
distribute the time over Estimating, Designing and Superintend- 
ence. The division is simple and inclusive; and the information 
gained is of value, because it helps to keep the constructive 
accounts of Superintendence and Estimating accurate. As the 
major part of the time will be charged to Superintendence, the 
additional work will be slight. 

Monthly wages paid to the Estimator, Bookkeeper, Stenog- 
rapher and Office Boy can be readily charged to their respective 
accounts each month. 

Field Materials. — Wise purchasing of material is as dependent 
upon effective Material Accounts as efficient management 
of labor is on Labor Accounts. The partner whose duty it is to 
purchase materials might succeed in getting good prices, but 
without some system he would be unable to follow up each pur- 
chase to see that the quality and quantity that he contracted for 
were delivered, that the materials were billed but once, and that 
the price as billed was the same as the agreed price. But the 
average man would not be able even to get good prices, because 
successful purchasing, like the letting of contracts, is not a ques- 
tion of picking the lowest bidder, but of carefully comparing 
values. Good judgment is a prerequisite; and with such a vast 
amount of detail, it is impossible to bring good judgment to the 
problem without some aid to the memory. For example, if coal 
is to be purchased, some of the questions which the purchaser 
should be able to answer are : 

Of whom have we purchased coal before? 

What were the prices? 

Was the quality of coal delivered satisfactory? 

Was the quantity as ordered? 

Was the service prompt? 



BOOKKEEPING FOR SMALL CONTRACTORS 267 

With such an important item as coal it may be easy to re- 
member the leading facts. But there are thousands of items to 
be dealt with, and no one is able to remember the detail necessary 
to good judgment in purchasing in such a wide field. The return 
in savings on purchases will more than pay for the extra cost of 
keeping what the small contractor may consider too elaborate a 
system of Material Accounts. 

Purchasing. — First, let us outline the various steps in purchas- 
ing; and in order to make the outline general, let us take the 
case in which the Purchaser must be notified of the need of 
material. For example, the hoisting engineer reports to the 
Timekeeper that he needs oil for his engine. The latter makes 
out a Purchase Requisition for the oil, — which is a notice that 
certain quantities of that material are needed, — and sends it to 
the Purchaser after it has been signed by the Superintendent. 
On receipt of the Requisition the Purchaser selects a Dealer and 
issues a Purchase Order for the oil. A copy of this is sent to the 
Timekeeper, who checks off the items when the material is 
received. By means of a Receiving Slip he notifies the Purchaser 
that the goods ordered have arrived. In general this is the 
method of making purchases. 

Stock forms for the work outlined above can be purchased 
of firms dealing in office records. They will serve the purpose 
quite well; but, of course, it is always more satisfactory to have 
special forms printed when possible, because the stock forms are 
of necessity general and cannot meet the special demands peculiar 
to the business. 

Purchase Requisition. — Purchase Requisitions should give 
such information as Contract Number, Requisition Number and 
Date, Point of Delivery, Quantity and Description of Material, 
Proposed Use, Date Wanted, Timekeeper's and Superintendent's 
Names. Also, space should be provided for the Purchaser's 
record of the firm from which the material was ordered and the 
number of the Purchase Order. They should be made in dupli- 
cate so that the copy may be kept on file at the job. Until a copy 
of the Purchase Order arrives this duplicate serves as a reminder 
that the materials needed have not yet been ordered. If, for any 
reason, the order is not placed promptly, the delay will be shown 
by the Requisition File, and a note of it made in the Daily Letter 
will correct the fault. This is a letter to the Office written each 
night by the Timekeeper and signed by. the Superintendent, and 



268 CONSTRUCTION COST KEEPING AND MANAGEMENT 

should contain a statement of progress made during the day and 
any items of special interest to the Office. 

Purchase Order. — Purchase Orders should give such infor- 
mation as Contract Number, Order Number, Date, Purchase 
Requisition Number, Dealer's Name, Place of Delivery, Proposed 
Use of Materials, Method of Shipment. They should be made 
in triplicate. The original goes to the Dealer as his authority 
for shipment, and gives him the identifying number to place upon 
his shipments and bills. In cases where the order arises out of 
a requisition, as in the case cited above, the duplicate goes to 
the department which made the requisition to give notice that the 
materials needed have been ordered. This leaves the triplicate 
for the Purchaser's record. It is usual to make these three 
copies of different colors, so that the department from which a 
paper comes may be told at a glance. Thin paper is used for the 
original and duplicate, and the triplicate is on a regulation card 
for filing. Hence, all three copies can be made at one time by 
the use of carbon sheets. By having thirty-one numbers printed 
horizontally along the top of the card the day of promised deliv- 
ery may be indicated by attaching an adjustable tab showing the 
month at the point where the date of delivery is printed. This 
enables the Purchaser to tell at a glance what orders are overdue, 
and thus avoid delays. 

It is not advisable to put the price on the Order. In the 
case of most of the small purchases the price is not known, the 
Purchaser relying on the past fair dealing of the Dealer for a 
reasonable figure. Before he pays for the goods he will, of 
course, determine whether the price is right or not; but if he 
waited to find out the price before ordering, his work would be 
seriously delayed to the detriment of the business. 

Receiving Slip. — Receiving Slips should give such infor- 
mation as Contract, Order and Receiving Slip Numbers, Date of 
Receipt of Materials, Shortage or Mistake, Quantity and Descrip- 
tion of Materials. They should be made out in duplicate, 
the original going to the Purchaser to notify him of the receipt 
of the materials that he ordered, and the duplicate remaining on 
the job. In case several shipments are necessary to make up the 
order, each separate delivery should be immediately reported on 
one of these slips; and on receipt of the final shipment, a note to 
that effect should be made on the slip reporting the receipt of 
the materials. As the several Receiving Slips come in, the Pur- 



BOOKKEEPING FOR SMALL CONTRACTORS 269 

chaser attaches them to the copy of the Purchase Order which 
authorized the shipment of the goods received. When the final 
Receiving Slip comes in he records on the Order the prices that 
have not already been recorded and "O.K's" it ready for check- 
ing the bills. If the Dealer does not deliver promptly the Pur- 
chaser will be notified of the fact by the Purchase Order which 
will be in his file of unfilled orders without a final Receiving Slip. 

Duplicate Bills. — Duplicate bills bearing the Purchase Order 
number may be demanded of vendors in certain cases. One is 
filed alphabetically and the other numerically, so that a bill can 
be found as readily when only the number is known as when 
the name of the vendor is known. 

Combined Purchase Requisition and Order. — There is a 
modification of the purchasing system outlined above which, if 
the conditions are favorable for its adoption, will save consid- 
erable time. The Purchase Requisition and Purchase Order are 
combined into one sheet, so that when the Requisition comes to 
the Purchaser he has simply to fill in the name of the Dealer. 
By the use of carbon sheets the Timekeeper makes five copies. 
One of these copies remains in the book for reference on the job 
and the other three, with the orginal, are forwarded to the 
Purchaser. The latter enters the name of the Dealer on the four 
sheets by means of carbon paper and sends the orginal to him 
as his authority for the sale. One of the copies goes back to the 
source of the demand to give notice of the purchase, and the 
other two copies remain with the Purchaser for alphabetical 
and numerical filing. As the materials purchased arrive, Receiv- 
ing Slips are sent to the Purchaser, and when the final shipment 
is received, the copy of the Order sent to the job by the Pur- 
chaser is returned to him with a note stating that the final 
delivery has been made and calling attention to faulty material 
or shortages. 

Price Records. — As these accounts are designed for a small 
contractor, it is safe to presume that he confines his activities 
to a few cities, or even to one city. If this is the case, his pur- 
chases are made among a certain limited. field of dealers. Hence, 
it will pay him to keep record cards showing the comparison 
of quotations on different staple articles. In this way he will 
be able to determine accurately the best place to purchase. 

The quantity and quality of each class of Construction Mate- 
rials will be determined from the drawings and specifications 



270 CONSTRUCTION COST KEEPING AND MANAGEMENT 

by the engineering department, who will inform the Purchaser 
as to what is necessary. The purchasing of these materials 
offers a big opportunity for saving and will have to be handled 
by the Purchaser himself. 

Field Supplies. — Many of the purchases of Construction 
Supplies will find their origin in a Purchase Requisition from the 
job. But it is necessary, in order to avoid great loss through 
delays, that the Timekeeper be authorized to make out Purchase 
Orders for such supplies as Nails, Rope, Brooms, Hose, etc., for 
immediate delivery. All such Orders should bear a distinctive 
mark and a serial number and be approved by the Superin- 
tendent. The method is the same as already outlined for regular 
purchases through the Purchaser. In this case, however, a copy 
of the Order goes from the job to the Purchaser, instead of from 
the Purchaser to the job. 

If the contract is very large it will pay to maintain a Store- 
room on the job, with a Storekeeper in charge. He should keep 
as careful records of the material received and disbursed as the 
work will allow. This in itself is a topic for elaborate discussion 
and space cannot be given to it in this chapter. 

Tool Record. — A Tool Record of some kind should be kept 
by every contractor no matter how small the job. Even if it is 
only an approximation to a correct record it will serve a good 
purpose, for if there are signs that records are being kept, the 
workmen will not know how accurate they are and will hesitate 
to appropriate tools for fear that the records will show their 
misdeeds. Just a simple record charging tools sent to the job 
and crediting those returned to the Storehouse or transferred to 
another job will save a great deal of money. If a Purchase 
Requisition comes in calling for tools for a certain sort and the 
Tool Record shows that a normal number have already been 
supplied to the job, the fact can be called to the attention of the 
Superintendent and a reason demanded for the necessity of such 
a large supply. 

Office Supplies. — Whether the firm be large or small, it is 
advisable to leave the purchasing or drafting and stenographic 
supplies to those departments, with the occasional supervision of 
the regular purchasing head. No one knows so well as the per- 
sons doing the work in these departments just what particular 
kind of material is needed. Also, when special technical knowl- 
edge is of value in making a purchase it is wise to allow the 



BOOKKEEPING FOR SMALL CONTRACTORS 271 

proper department to place its own order. But for every pur- 
chase there should be a Purchase Order issued by the Purchaser 
or somebody authorized by him. 

Plant Depreciation. — Whether a contractor's plant is in 
use or in storage it is depreciating in value. Even the moment 
an article is purchased its value drops, because the article imme- 
diately becomes second-hand. If the loss in value of plant due 
to depreciation is not taken out of the gross profits and either 
put back into the business or used to establish a fund with which 
to purchase new plant when that now in use must be discarded, 
the capital is being impaired and the business ruined. 

Until recently it was customary to charge out a certain 
percentage of the value of the plant at the end of the year in 
the Profit and Loss Account; but this method does not give the 
correct cost of each separate piece of work, because each job 
has the use of certain plant and should bear a proportion of the 
total depreciation. 

One modern method of handling this account is to credit 
the Equipment Account and charge an Equipment Depreciation 
Suspense Account, with the estimated amount of depreciation 
for the coming year. Then the value of the business for the 
coming year is estimated, and as each contract is completed it 
is charged with a part of the total depreciation for the year 
determined by the ratio of the value of the contract to the esti- 
mated business for the year, and the Equipment Depreciation 
Suspense Account is credited with the same amount. 

This scheme presents several difficulties. In the first place, 
the amount of plant that will be carried during the year is un- 
known, and hence the per cent, for depreciation cannot be accu- 
rately determined. Also, the amount of business which will be 
done during the coming year is an unknown quantity. Again, if 
you charge a certain proportion of the depreciation on all plant to 
a contract, whether the total of that proportional part of the 
entire plant was used on the job or part was used and part was 
in storage, the amount of depreciation which you charge to a 
contract this year when business is dull will be quite a different 
amount from what you would charge for the same piece of work 
next year when all your plant is in use. In other words, if this 
method is used the records will lose their value for comparisons. 

It may be argued, as above, that it costs a contractor the total 
amount of the depreciation to maintain his business, and that as 



272 CONSTRUCTION COST KEEPING AND MANAGEMENT 

he does so much business with that amount as one of the items 
of expense, each part of the business done costs its proportion of 
the total depreciation. Nevertheless, what it costs a contractor 
to maintain his business and what it costs him to perform the 
contracts of the year are quite different. For example, if he 
obtained no contracts at all for a year he would still have a con- 
siderable item for Equipment Depreciation, and this would have 
to be charged to maintaining his business. When his plant is 
not all in use, that part of the depreciation which is on account 
of plant in storage is a part of the expense of maintaining his 
business and not a part of the cost of performing the contracts 
in hand. The reason why some advocate this proportional 
method is that they confuse the point of view; they look at the 
question from the point of view of an outsider, rather than that 
of the contractor. An outsider knows that a contractor must at 
least make enough on his contracts to cover the total expenses, 
and that if work is being done the owner is going to help to pay 
those expenses. Thus, to the outsider, a ratable proportion of 
the expense for depreciation will be charged to the work being 
done for him, and it will be; but the contractor wants his accounts 
to tell what it costs for the depreciation of the plant actually 
used in the completion of the contract, so that the figures will 
be useful in estimating on future work; also, what it costs to 
carry idle plant in order to remain in business. 

This information can be readily obtained if the proper method 
is followed. Some record of the equipment on the work and in 
storage must be kept in any event. Also, a schedule of deprecia- 
tion rates for the different items of plant must be made out, if 
anything like an accurate charge for depreciation is to be made. 
If the monthly depreciation rate is entered opposite each plant 
charge to the different jobs and storage accounts, this can read- 
ily be multiplied by the time during which the item of plant re- 
mains charged and the amount of depreciation entered in the 
column next to the rate. The total of the amount column can 
then be charged to the job in case the plant is in use, or it can be 
carried into a Profit and Loss Account in case the plant is in stor- 
age. This method is even simpler of operation than the first one 
described. 

It is, of course, obvious that if plant is carefully repaired its 
life may be indefinitely extended, and hence the rate of deprecia- 
tion lowered. Just how much a certain piece of plant will be 



BOOKKEEPING FOR SMALL CONTRACTORS 273 

repaired cannot be predicted; but if we should credit out the cost 
of all repairs except those due to accidents, unforeseen break- 
downs, etc., against the charges for depreciation, we would 
practically charge off depreciation at this modified rate. If we 
charge depreciation at some arbitrary rate and then also charge 
the business with repairs which counteract the effect of deprecia- 
tion, it is clear that we are overloading with expense, because we 
are charging depreciation at an excessive rate. But there are 
so many difficulties in separating the expenses for repairs into 
those that should be credited in the Depreciation Account and 
those that should be charged against Repairs, that it seems better 
for the small contractor to charge all against Repairs. In 
handling the account in this way he is, at least, on the safe side 
financially. 

Interest on Plant. — Contractors doing work on the cost-plus- 
a-fixed-sum or the cost-plus-a-percentage, basis are anxious — 
and justly so — to include among the items of cost the interest 
on the money invested in the plant used on the work. By fol- 
lowing the usual method of simply charging off among the 
Overhead Expenses a- certain percentage of the total capital as 
interest, the interest on the money invested in plant is finally 
charged against the several contracts because it swells the per- 
centage charge for Overhead Expense. But the amount which 
is charged to each job is not based on the ratio between the plant 
used on the job and the total plant owned by the contractor; 
hence the charge may be unjust and open to objection on the 
part of the person for whom the work is being done. If it is 
true in this case, it is also obvious that the contractor doing 
work on the ordinary contract basis is not arriving at its true 
cost if he follows this method of charging interest. 

If a column is provided next to that for depreciation in the 
scheme outlined above for handling Depreciation, the charge for 
interest can be entered as easily as that for depreciation, and the 
total charged off against the job. 

Interest on capital in other forms necessary to the business 
will have to be charged off through Overhead Expense. The 
amount of this charge will be equal to the difference between the 
interest on the total capital and the total of the plant interest 
charged to the several jobs. 

Electricity Purchased. — In case steam and electricity are 
bought from outside concerns we will have bills coming in for 

18 



274 CONSTRUCTION COST KEEPING AND MANAGEMENT 

steam and electricity in addition to those for water. A note of 
the reading of each meter should be made periodically on a job 
Purchase Order and forwarded to the main office as if a purchase 
had been made. 

Liability Insurance. — Insurance on employees is figured on 
the weekly pay roll, and a Purchase Order should be made out 
for the amount when the pay roll comes into the office. Time- 
keepers' Bonds and all other items of expense of a similar nature, 
the amount of which is definitely known before the bills come 
in, can be handled in the same way. When the bills are received 
they can thus be checked in the same way as for purchases, and 
shere will be no danger of paying the same bill twice. 

Miscellaneous Office Expense. — The items that go to make up 
the Miscellaneous Expense Account are comparatively few in 
number. Their nature is such that they do not lend themselves 
to the methods already outlined for collecting items of expense. 
As the bills come in for Rent, Telephone and Telegraph, Insur- 
ance, etc., they are referred to the proper persons for their "O. 
K.," and a glance at the account books, contracts, leases and 
other papers will establish the justness of the claim. 

Such small items as Postage and Car Fares can best be handled 
through a Petty Cash Account. A certain amount of cash, to 
be determined by the previous experience of the business, is 
turned over to one in charge of this account and is charged on its 
records. All expenditures are credited to the account and 
vouchers obtained. Either periodically, or when the cash on 
hand reaches a certain low figure, the vouchers are turned in and 
cash to the amount of their total paid into the Petty Cash Fund. 

This amount plus the cash on hand should always equal the 
original amount assigned to the account. 

Sub-contracts. — The amount of expense due to parts of 
the main contract being sub-let can, of course, be obtained from 
the contracts. 

General Miscellaneous Expense. — What has been said of 
the items under Miscellaneous Office Expenses applies equally 
well to those found under General Miscellaneous Expense. 

Distribution of Expenditures. — We have now described the 
various accounts and discussed the methods of gathering the 
data for them. But only a small percentage of the value of these 
data could be realized if the accounting work were dropped at 
this point. It still remains for us so to group and arrange these 



BOOKKEEPING FOR SMALL CONTRACTORS 



275 



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276 CONSTRUCTION COST KEEPING AND MANAGEMENT 

data that they will show at a glance the expense of the different 
divisions of the work. 

Columnar ruled Distribution Sheets afford the best solution 
of the problem of distributing expenditures. (See Form III.) 
These are simply sheets headed with the names of the general 
accounts to be charged and ruled with vertical columns for the 
amounts to be entered under the subdivisions of the general 
accounts. At the extreme left hand side is a column for the 
date, the smaller column to the left of each amount column is 
for the number originally put on the Purchase Order, and the 
very narrow column to the right of each amount column is for 
tick marks in checking. 

In the following Schedule for Distribution of Expenditures 
the items found in the second subdivisions and marked (1), (2), 
(3), etc., will be the headings for distribution sheets; e.g., Field 
Management, Field Incidental, Construction. Items found in 
the third subdivisions and marked (a), (6), (c), etc., will be 
headings for the columns; e.g., Superintendent, Assistant Super- 
intendent, Mason Foremen, etc. 

When a bill is checked and ready for payment it should show 
on its back the total expenditure distributed over the various 
items of which it is composed. By using a system of symbols, 
such as shown to the right of the schedule below, we are able 
to designate with little labor both the account to which an item 
should be posted and also its location in the records. 



Schedule of Distribution op Expenditures 

I — Direct Expense. 

(A) Field Labor. 

1. Field Management 115-FF 

(a) Superintendent 115-FF-l 

(6) Assistant Superintendents 115-FF-2 

(c) Mason Foremen 115-FF-3 

(d) Bricklayer Foremen 115-FF-4 

(e) Carpenter Foremen '. 115-FF-5 

etc. 

2. Field Incidental 115-FI 

(a) Time keeper 115-FI-l 

(b) Night Watchman 115-FI-2 

(c) Day Watchman 115-FI-3 

(d) Water Boy 115-FI-4 

etc. 



BOOKKEEPING FOR SMALL CONTRACTORS 277 

3. Construction 115-FL 

(a) Masons 115-FL-l 

(&) Bricklayers 115-FL-2 

(c) Carpenters 115-FL-3 

etc. 
{B) Field Materials 

1. Construction 115-FM 

(a) Lumber 115-FM-l 

(&) Cement , 115-FM-2 

(c) Sand 115-FM-3 

(rf) Crushed Stone 115-FM-4 

(e) Brick 115-FM-5 

etc. 

(C) Field Supplies. 

1. Construction 115- FS 

(a) 115-FS-l 

(b) 115-FS-2 

(c) 115-FS-3 

(D) Field Miscellaneous Expense. 

(1) Incidental 115-FX 

(a) Photographs 115-FX-l 

(b) Insurance 115-FX-2 

(c) Plant Rental 115-FX-3 

(d) Plant Interest 115-FX-4 

(e) Plant Depreciation 115-FX-5 

etc. 

(E) Sub-Contracts. 

1. Construction 115-FU 

(a) Roofing 115-FU-l 

(&) Excavation 115-FU-2 

(c) Plumbing 115-FU-3 

etc. 

II — Overhead Expense. 

(A) Office Labor. 

1. Management OD 

(a) Manager OD-T 

(&) Chief Engineer OD-2 

(c) Estimator OD-3 

(d) Book keeper OD-4 

(e) Stenographer OD-5 

(f) Office Boy OD-6 

etc. 

(B) Office Supplies. 

1. Incidental OS 

(a) Engineers' Supplies OS-1 

(b) Book keeper's Supplies OS-2 

(c) Stenographer's Supplies OS-3 

etc. 



278 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(C) Miscellaneous Expense. 

1. Incidental OX- 

(a) Telephone and Telegraph OX-1 

(6) Postage OX-2 

(c) Rent OX-3 

(d) Traveling OX-4 

etc. 

(D) General Miscellaneous Overhead Expense XX 

(a) Charity XX-1 

(b) Insurance XX-2 

(c) Interest XX-3 

(d) Advertising XX-4 

(e) Legal Services XX-5 

etc. 

Hence once the distribution has been written on the back of 
the bill, the remaining work is merely mechanical; for, by simply 
glancing at the back of the bill, the bookkeper is able to turn 
immediately to the column in which the amount is to be entered. 

In this system the first number is that of the contract to 
which the charge goes. Of course, this number will not appear 
in the symbols of the accounts under Overhead Expense, as these 
are not directly chargeable to the individual contracts. The 
method of handling these accounts will be made clear when we 
come to discuss the Profit and Loss accounts. Following the 
contract number are two mnemonic symbols which show the sub- 
division of the accounts under which the item comes, and the 
distribution sheet on which it is to be charged. The number 
following indicates the column in which the amount to be charged 
to the sheet should be entered. 

To illustrate, let us suppose that a bill has come in for — 

200 ft. % in. wire rope, at 10 cts $20. 00 

50 lbs. "Slip Easy," at 3 cts 1.50 

50 window weights, at 15 cts 7.50 

$29.00 
On the back of the bill the bookkeeper would write : 

115-FS-3 $21.50 

115-FM-12 7.50 

$29.00 

When he was ready to post these amounts he would turn to the 
Field Supplies Sheet for Contract 115 and enter $21.50. Then 



BOOKKEEPING FOR SMALL CONTRACTORS 279 

he would post $7.50 in column 12 of the Construction Material 
Sheet for Contract 115. The accounts with Field Supplies and 
Construction Materials are subdivided, so as to give data on the 
various supplies and materials. Subdivision of this kind depends 
entirely on the particular needs of the work, and the business 
of each firm has to be studied before they can be made. 

From week to week, as the pay-roll statements come in from 
the Timekeeper, the Trade Totals are transferred by the Book- 
keeper to their respective summary sheets, as shown by Form 
IV, page 280. After each entry the total to date is written in 
small figures with red ink under the entry. The Trade Totals 
for the week are added and the result placed in the Weekly Total 
column. This amount is then added to the Grand Total for last 
week, which gives the total cost to date. This method of handl- 
ing the accounts makes it possible to tell on Monday morning 
how much has been expended on any contract for Construction, 
Incidental and Management Labor up to the preceding Thursday 
night; it tells how much these items cost for any week; and it 
gives the total amount paid for any single item of labor for anv 
week, for any number of weeks, or to date. 

On the Sub-contract Distribution Sheet a column is assigned 
each contract. As payments are made for the value of the 
completed work less a percentage, the net amounts are entered 
in their respective columns. The total amount of the contract 
is entered in the heading of the column. Knowing the percent- 
age, it is an easy matter to tell at any time how a contract stands. 
To those who are inseparably attached to debits and credits this 
may sound childish because of its simplicity; but it is a very 
practical method in use on large contracts. 

Summary Sheet. — Every month the totals from distribu- 
tion sheets of each contract are posted to their respective Sum- 
mary Sheets. Column headings for such sheets are shown by 
Form V, page 275. By writing the totals of each column in 
small figures under each entry we are able to read the totals to 
date for each column as well as the monthly totals. 

Profit and Loss Accounts. — As stated before, it is impossible 
to charge the items under Overhead Expense directly to the 
contracts. If we knew how much business we were going to 
carry during the year we could charge off against each contract 
a proportion of the Overhead Expense determined by the ratio 
of the contract price to the total amount of the year's contracts. 



280 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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BOOKKEEPING FOR SMALL CONTRACTORS 281 

Unfortunately there is no way of determining this unknown 
variable. And even if we could, the result obtained by the 
method just outlined would not be correct, because some of this 
expense is due to the contracts handled and some to maintain- 
ing the business. Should no contracts be carried for a year, 
the entire amount of this expense would have to be charged 
against maintaining the business, for there would be no contracts 
to charge it against. 

The only way to handle the Overhead Expense Account is 
. to close it into a Miscellaneous Profit and Loss Account. Depre- 
ciation of plant in storage should also be closed into the account. 
This account will show a big loss, as the only credit will be Dis- 
counts Gained and some small miscellaneous items. 

Field and Sub-contract Costs are added together for each 
contract and these totals closed into a Contract Profit and Loss 
Account. In this case the credit side will be large and a big 
gain will be shown, which should more than offset the loss in the 
other account. 

Finally, these two Profit and Loss Accounts are closed into 
a Surplus Profit and Loss Account, which shows the loss or gain 
for the month. 

In making up the unit costs as the work progresses, a certain 
percentage of the Field Costs can be added for Overhead Ex- 
pense. The percentage for this approximation can be deter- 
mined from the previous experience of the business. 

It would be necessary to devote an entire book to the subject 
of contractor's accounts in order to treat of it fully. Even with 
such an amount of available space, the discussion could not hope 
to be more than suggestive, because each individual business 
must be studied in order to design accounts to meet its particular 
needs. Hence, it is clear that this short chapter is only an out- 
line. Many points have been barely touched upon and some 
have been omitted altogether, but if the discussion has made it 
clear to the small contractor how he can improve his accounting 
work it has accomplished its purpose. 

Equipment Account. — Benjamin L. Lathrop gives the follow- 
ing suggestions in Engineering Record, July 8, 1916: 

A ledger account may be kept for the portable equipment of 
each job, but ordinarily a more convenient method is to run 
only one account, which for the sake of brevity we will call 
"Plant." Portable plant, being shipped about from job to job, 



282 CONSTRUCTION COST KEEPING AND MANAGEMENT 

is rather difficult to keep track of unless some definite, easily 
operated system is employed. A card record supplies the 
simplest solution. Cards measuring 3 by 5 in. are the stand- 
ard size, fitting the box files or drawer units handled by most 
dealers in office supplies. If economy demand that for a time 
such records be kept in a pigeon-hole of the desk, or even in a 
pasteboard box, at least be sure a start is made with the proper- 
sized card, so that all the matter will not have to be rewritten 
later. Index cards can be procured with 34 -m - tabs. 



BUCKET 




1 Special No. 10 


— cost $90.00 


Bought Aug. 1, 


1914 of 


Dayton 


Supply Co. 


for Acton work 




Transferred Jan. 


5, 1915 to Portland 


Sept. 


10, 1915 to Bridge No. 4 



DERRICK 

1 Stiff-leg, 22' mast 38' bo.om 
Bought Sept. 1, 1915, second hand, of 

<Smith & Co. for $120.00 
for Bridge No. 4 



MIXER 






1 Burke Gasoline 


Concrete Mixer 


Bought Feb. 


12, 


1915, of D. E. Francis 




for $800.00 


for Portland 


work 


Transferred Sept. 


10, 1915 to Bridge No. 4 



Fig. 45. — Equipment file cards. 

To demonstrate, let us list the equipment of our fictitious 
friends Messrs. Arnold, Brown & Co. On the first tab will be 
written "Bridge No. 4," to indicate that the cards, shown in 
Fig. 45, serve to list the equipment on that job. Following out 
here the alphabetical idea, the first cards after the index card 
will read somewhat as shown in the accompanying samples. 
Others will follow till the list of equipment at Bridge No. 4 is 
complete. 

Then on the tab of another index card will be written "Corfu," 
and following that will come the cards descriptive of the Corfu 



BOOKKEEPING FOR SMALL CONTRACTORS 283 

plant, and so on till the entire plant is recorded and indexed. 
When additional equipment is purchased, the invoice or bill of 
sale will be approved, entered and filed as suggested in a previous 
article of this series, and charged to "Plant;" at the same time 
a descriptive card will be prepared and placed in the index. 
Now, when the Bridge No. 4 mixer is moved to the job at Leeds 
the card is moved along, too, after noting thereon the date on 
which the change was made. 

The plant account should be kept at cost, until such time as a 
complete revaluation becomes necessary. In the meantime 
annual depreciation should be balanced by entries to the credit 
of "Reserve for Depreciation," as will be explained in a subse- 
quent article. 

Small tools, such as shovels, picks, crowbars, hand drills, etc., 
should not be carried in the plant account, but charged to the 
expense incident to each contract. Should there be any salvage 
at the conclusion of the job, the job can be given credit at an 
appraised valuation and a corresponding expense charge made 
against the next contract on which such tools or left-over sup- 
plies may be used. 



CHAPTER VIII 
OFFICE APPLIANCES AND METHODS 

There are many appliances which can be used in the office for 
the compiling of records gained in the field and which may also 
be useful in general office work. 

Time Clocks. — An appliance which may not, in general, used 
in the field, but which is of immense value in the office and 




Fig. 46. — Automatic time clock with 100 card rack. 

particularly in a shop, is the time clock. Various forms of time 
clocks are in common use, two types of which are illustrated. 
Figure 46 is a time card recorder, which is a clock so made that 
it will automatically stamp on a card inserted in a slot in the 
clock by the workman the time of his arrival and of his departure. 
The cards are made to hold a record covering the pay period and 

284 



OFFICE APPLIANCES AND METHODS 



285 



need no attention from a timekeeper or clerk until the termina- 
tion of this period. The record of the men's time can then be 
compiled very readily by one who need not be a skilled mathe- 
matician or time clerk. 

The time clock system has been developed very highly in 
shops for keeping track of time used in completing any job by 
workmen, but as this in a way is not in the realm of field cost 
keeping, it will not be entered into here. 




Fig. 47. — Weekly dial recorder, automatic, with two color printing device. 

Another form of time clock, shown in Fig. 47, has the num- 
bers of the employees fixed on the outer edge of a disk or ring 
and a record is made by the employee who shifts a revolving 
arm and punches his number upon entering the office and leaving. 
The working up of the employees' time then becomes simply a 
matter of computation from printed figures. These two types 
are made by the International Time Recording Co. of New 
York. 

Time Clock Saves Office Work on Large Job. — An unusual 
office system for keeping time, checking tools and making dis- 



286 CONSTRUCTION COST KEEPING AND MANAGEMENT 

tributions, on the contruction work of the H. Koppers Company, 
is given in Engineering Record, Dec. 9, 1916. It involves the use 
of a time clock, turning in of the distributions by the general 
foremen, and the issuing of from four to six tool checks to each 
man, and is said to save much office work and to give accurate 
results. 

The men on going to work and leaving punch a slip in a time 
clock at the office. These slips are checked up by the timekeeper, 
who covers the job once during the day and sees that every man 
who has punched the clock is at work. From these slips the 
time is entered daily on the pay roll. This timekeeper does not 
bother with the distribution of the labor, which is turned in each 
night by the general foremen. Each sub-foreman is supplied 
with small sheets on which he writes the names and numbers 
of the men in his gang and a description of the work he did during 
the day. This takes only a short time. These slips are turned in 
to the general foremen before leaving, who in turn hand them 
to the office force. From these slips, using the proper distribu- 
tion numbers, two men in the office compile the labor charges 
and check the pay roll. 

This system simplifies the task of the timekeeper, who has only 
to check the time worked by the men, and also the task of the 
foremen, each of whom has only to put down the names of men 
in his gang and furnish a short description of the work done. 
With all the information on the desk in front of him, it is then an 
easy task for an office man to make the distributions and check 
them with the time worked. In this way three office men keep 
a close check on the doings of 450 workmen at a cost which 
ordinarily would permit of keeping only a general distribution 
of the time worked on different classes of construction. 

Another good feature of the system is the method of checking 
the issuing of hand tools to the men. Each man, depending on 
whether he is a laborer or a mechanic, is given from four to six 
brass checks, each with his number on it. When he takes a 
shovel or a wrench from the tool house he gives up one of these 
checks. On a large rack on one side of the tool house are several 
hundred hooks, under each of a certain number of which is 
printed the word "Shovel," which other hooks are labeled 
"Pick," "Wrench," "Hammer," etc. The man's check is hung on 
one of the hooks labeled with the name of the tool he has taken. 
With he returns the tool his check is given back to him. Before 



OFFICE APPLIANCES AND METHODS 



287 



pay day, or when a man is discharged, if he cannot show all the 
checks issued to him the storekeeper can tell in a few seconds 
whether he has any tools unreturned and what they are. He 
can also tell at a glance how many tools of any kind are out 
and who borrowed them. 

Electric Job Time Recorder. — A cost or time job recorder is 
shown in Fig. 48. This device will record the time spent on 
jobs. It prints the time of starting and completing a job, the 
latter above the former, making the process of deduction simple. 
The revolving dial sets the card in the proper position for printing 
the record. 







" ■ W''- 




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.■'■JP UpS| ^PP^f 





Fig. 48. — Electric job, time recorder. 

This machine is made to print records in hours and minutes, or 
in tenths or hundredths of hours. It is equipped with an alpha- 
betical or numerical symbol printing wheel designating either 
the day of the week, or date of the month, and may be had to fit 
any system of job recording. This machine is made by the 
International Time Recording Company of New York and sells 
for around $110 depending upon the attachments. 

Time Stamp. — A time stamp that records every minute of 
the day and night and trips the date automatically at midnight 
is shown in Fig. 49. This machine may be made up to fit almost 
any system of timing orders, cost work or time card work. The 
machine weighs 15 lb. and sells for $55. Fitted with a gauge, the 
machine may be used to record the time of getting to work, time 
out and in of lunch, and quitting time of employees. With this 



288 CONSTRUCTION COST KEEPING AND MA N AGE MEN T 



attachment the cost is $65. The machine is made by the Follett 
Time Recording Company of New York. 




Fig. 49. — Follett time stamp. 

Either of the two machines described above can place a stamp 
upon papers received in the office and show the hour and minute 



••*.»» NAME NOl /$.'? DATE 


PUT NO. 


NO. 


is 


\ ORDER 
! NO. 


COST 


RATE 


DlpfiMl 


RECORD 
















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TOTAL COST 


kn 


u 


TOTAL TIME 





fo&o 



DAILY COST CARD 



e 


HAD 27 


8 00 


7 


NAD 27 


6 00 


6 


MAR 27 


5 00 


5 


NAK 27 


2 10 


A 
1 


MB 27 


lid 


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PRODUCTION COST CARD 



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WR 2 6 7 8 8 



Fig. 50. — Specimen job time cards. 

both morning and afternoon, the date of receipt, and, in a 
machine with various refinements, the name and address of the 



OFFICE APPLIANCES AND METHODS 



289 



owner, the classification of the matter received, and a mark indi- 
cating the person who received it. In the case of orders issued 
to field employees or reports received from them, such an accurate 
stamped record as this machine will give might avoid serious 
controversy in case of delay from any cause. The exact time of 
receipt of a report is shown or the exact time of the issuing of an 
order, and, if the order is not promptly obeyed, the man to 
whom the order is issued cannot plead the excuse that the order 
was not issued until after a time too late for its effective execu- 
tion. Speciman job time cards made with these machines are 
shown in Fig. 50. 




Fig. 51. — Mimeograph. 



Rubber Stamps. — A full equipment of ordinary rubber stamps 
will be found decidedly useful in an office. Not only is much 
writing saved by their use, but accuracy is insured. 

Mimeograph. — In its improved form the Edison mimeograph 
consists of a cylindrical frame for holding a waxless stencil 
through which mimeograph ink is forced at even pressure to the 
receiving sheet of paper. The stencil permits the duplication 
of designs, diagrams and free hand drawings on the same sheet 
that carries the typewriting. 

There are various sizes of mimeographs. Figure 51 shows one 
priced at $110. This machine equipped with an automatic feed 

19 



290 CONSTRUCTION COST KEEPING AND MANAGEMENT 



costs $150. These machines with stands and motors for electric 
operation cost about $100 more. A small machine costs $45. 
The Mimeograph is made by the A. B. Dick Company of Chicago 
and New York. 

The authors have used the mimeograph extensively for making 
report blanks, as well as for issuing orders. On any new class 
of work, it is generally wise to use mimeographed report blanks, 
for changes in the methods of doing the work and in the organiza- 
tion are likely to occur, and such changes frequently necessitate 
alterations of the report cards. A new report card can be quickly 




Fig. 52. — Burroughs adding or listing machine. 



designed and hundreds struck off with a mimeograph, without 
any delay in waiting for printers. 

Adding or Listing Machines. — Where there is any considerable 
amount of office work, an adding machine should certainly be 
used. Figure 52 shows a Burroughs machine, hand-operated. A 
nine column machine costs from $150 to $400 depending upon 
the refinements and whether it is hand or electrically operated. 
These machines are made by the Burroughs Adding Machine 
Company of Detroit. 

Calculating Machines. — Figure 53 shows the Comptometer 
made by the. Felt and Tarrant Manufacturing Company of 



OFFICE APPLIANCES AND METHODS 291 

Chicago. This machine may be used for ordinary arithmetical 
processes. It costs from $300 up depending upon the number of 
columns of keys. 

A similar machine is manufactured by the Burroughs Adding 




Fig. 53. — Comptometer. 

Machine Company and is shown in Fig. 54. A 10-column capa- 
city Burroughs machine costs $200. 

Another make of calculating machine is shown in Fig. 55. It 
is the Monroe Calculating Machine. This machine works on a 




Fig. 54. — Burroughs calculator. 

different principle from the machines previously described in 
that the selecting of numbers and carrying of tens is accomplished 
by direct lever and cam action instead of by springs. It is 
manufactured by the Monroe Calculating Machine Company 
of New York and sells for $300. 



292 CONSTRUCTION COST KEEPING AND MANAGEMENT 

A calculating machine that differs from those previously 
described in that it has but 10 keys and a listing attachment, is 




Fig. 55.— Monroe calculating machine. 




Fig. 56. — The Dalton machine. 



made by the Dalton Adding Machine Company of Cincinnati. 
This machine is illustrated by Fig. 56, and is used for adding, 



OFFICE APPLIANCES AND METHODS 



293 



subtracting, multiplying, dividing, interest figuring and numer- 
ous other mathematical calculations. Its price, regular size, 
is $250. This machine may also be had in various styles at a 
cost of from $125 to $350 and may be equipped with electric 
drive at a cost of $100 extra. 

Complete instructions are given by the manufacturers of 
calculating machines, and, when once mastered, these machines 
will be of inestimable value. 

Portable Typewriter. — A portable typewriter which may be used 
to great advantage in writing up field reports and work of like 
nature is shown in Fig. 57. This machine is manufactured by the 
Underwood Typewriter Company of New York and sells for 





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tfjjQlQfls#5y5r 






^WEEEHff'i'iu.'. ^^IfcflWTriMf 





Fig. 57. — Portable typewriter. 



Slide Rule. — It is of course understood that the slide rule is 
not a multiplying machine that is accurate beyond certain limits. 
Within those limits — which depend on the kind and size of the 
rule — it is perfectly accurate. For purposes of estimating and 
for making ordinary designs, the slide rule gives results that are 
close enough. A 10-in. rule — the size most commonly used — 
costs $7.50. Any dealer in civil engineering instruments will 
furnish slide rules. 

Planimeter. — The planimeter, like the slide rule, is so well 
known as scarcely to require mention here. For figuring the 
areas of irregular cross-sections, the planimeter is a great labor 
saver; but its absolute accuracy depends largely upon the scale 
to which the cross-section is plotted. The commonest error in 



294 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the use of a planimeter is the plotting of cross-sections to a small 
scale. 

There are many styles and sizes of planimeters, ranging in 
price from $16 to $100. A good instrument for ordinary use 
can be had for $25. 

Graphic Charts. — Charts may be used to great advantage for 
cross-section work, drawing up details, designing, estimating 
and for plotting records of cost and performance. 



Computation.. 



. — — SHEET OE SHEETS 

COMPUTED CHECKED 

' 

I II 11 I I— I I 1 1 ! I I 



Fig. 58. — Earthwork computation sheet. 



Cross-section charting paper is ordinarily divided into tenths 
or twentieths of an inch, and will be found of material assistance 
in drawing to scale the section of any excavation, fill or work of 
like nature. 

In detail work, a ruling, divided into 20, 16, 12, 10, 8 or 4 
divisions per inch may be well used for drawings, either actual 
size or scaled, of machine parts, patterns, forms, concrete slabs, 
etc. 

Sheets, such as the above, may be used in designing and will 
provide a means to eliminate long and tedious calculations. 



OFFICE APPLIANCES AND METHODS 295 

They may also be used in estimating and will present a rapid and 
accurate method which is highly recommended for wide use. 

Charts of progress on work present a picture of actual per- 
formance that will show, with intelligent study, whether an 
operation or job is progressing according to the required schedule 
or is falling behind. 

The methods of making charts and their applications can only 
be referred to here. A book covering this subject in detail 
however, may be had of the Codex Book Company of New York. 
It is called "How to Make and Use Graphic Charts" by A. C, 
Haskell. Sheets of ruled paper, especially designed for this work, 
are also furnished by this company in a wide variety of rulings. 

Forms. — Miscellaneous cost and computation forms are des- 
cribed in Chapter IX. A standard form for earthwork compu- 
tation is shown in Fig. 58. This form is one of a number 
furnished by the Codex Book Company of New York. The 
forms are made up in pads of 100 sheets each and cost $2 per pad 
printed on bond paper. 

Order System by Means of a Card Index. — This system, 
which was used by a large contracting firm, was described by 
C. Arthur Worden in Engineering-Contracting, June 3, 1908, 
as follows: 

Each order is made out in triplicate. The original, Fig. 59, 
is mailed to the firm or party from whom the material is ordered. 
At times, the list of material is too large to be put on the regular 
order form and in that case the words "kindly furnish us with 
material as per list attached to and forming a part of this order" 
are substituted. The list is then made in triplicate, and one copy 
is attached to each copy of the order. 

This and the blanks shown in Figs. 60, 61 and. 62 are much 
condensed. 

The "Office and Purchase Record," Fig. 60, is retained in the 
Home Office, while the "Receiving Department" copy is mailed 
to the Field Office having that particular contract in charge. 

Figure 59, as will be noted, gives the forwarder of material all 
information in regard to shipment, manner of rendering invoice, 
etc. Attached to this slip are two stubs: the first, or acknowl- 
edgment slip, is to be returned to the contractor immediately, 
stating probable date of shipment; the second slip is returned as 
soon as the order is completed, and should have attached the 
itemized invoice and Bill of Lading. 



296 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Order No. 2510 



Date April 25108. 



James Goodnow, Esq., 

143 Liberty St., 
New York City. 



JOHN DOE CO. 

Engineers and Contractors 

N. Y. City. 



Please furnish us, without delay, the following material: 

(a) 150 feet Monarch sash chain at 3 cents per ft. 

(b) 10 kegs 20d wtre nails at $2.50 per keg. 

Send Bill of Lading and itemized invoice to us on day of shipment. 

Always put order number on invoice. 

No boxing or crating paid for unless specified on order. 



Ship via 
Ship to 


N. Y. C. & H. R. F. 0. B. NewYork 


John Doe Co., 




c/o Frank Miller, 


Albany, N. Y. 



JOHN DOE CO. 

By C. A. Warden. 



(Detach and return to us.) 



JOHN DOE CO., New York: 

We have this day completed shipment on your order No. 

forward via Ex^reSco. 



.190, 



same going 



(Detach and return to us.) 



Acknowledgment Slip. 



_190_ 



JOHN DOE CO., New York: 

We acknowledge receipt of your order No^ 



. and will ship from 



(Give definite date of shipment.) 
This order will be executed in accordance with conditions stated. 



Fig. 59. — Order blank. 



This and the blanks shown in Figs. 60, 61 and 62 are 
much condensed. 



Order No. 2510 



Date Apr. 26/08. 



James Goodnow, Esq.. 

143 Liberty Street, 

New York City. 



Office and Purchase Record 

JOHN DOE CO. 

N. Y. City. 

Freight $1.84 Transp't'n p'd by/.Z) 

Cartage 8 .25 Date Rec'd 4/3/08' 

Express $ Checked by J . D. 



(a) 150 feet Monarch sash chain at 3 cents per ft. 

(b) 10 kegs 20d wire nails at $250 per keg. 



Charge a to 

" b to 

to 



Doors and Windows 



Timber 



Ship via N. Y.C.&H.R. 
Ship to John Doe Co. 



F. O. B. New York 



c/o Frank Miller, 



Albany, N Y. 



Order completed 
Bill Checked by " 
Date 4/6/08' 



4/1/08 



O. K. 



Voucher No. 



374 



Fig. 60. — Office and purchase record blank. 



OFFICE APPLIANCES AND METHODS 



297 



The "Office & Purchase Record," Fig. 60, is printed on a 
light weight card, suitable for filing in a small vertical file. The 
order number, date, and name of party to whom order is given, 
appear in the extreme upper left hand corner, thus giving easy 
access to the record in the file when desired. In the upper right 
hand corner, blank spaces are given in which are to be noted the 
amount of freight, express or cartage paid by the Field Office, 
date of delivery, name of party paying transportation charges 
and party checking the material upon receipt. This information 
will be noted on the Record as soon as the receiving slip is 
received from the Field Office, and will be needed in checking 



Order No. 2610 



Date Apr. 25/08 



James Goodnow, Esq., 

143 Liberty Street, 

New York City. 



RECEIVING DEPARTMENT 

JOHN DOE CO. 

N. Y. City. 

Freight $1.34 Transp't'n p'd b yJ.D 

Cartag e $ .25 Date Rec'd 4/3/08 

Express $ Checked by J. D. 



(a) 150 feet Monarch sash chain at 3 cents per ft. 

(b) 10 kegs 20d wire nails at $2.50 per keg. 



Charge a to 
b to 



Doors and windows 



Timber 



Ship vi a N. Y. C. & H. R. F. O. B. New York 
Ship to John Doe Co., 

c/o Frank Miller, 



Albany, N. Y. 



Check up all goods as soon as received, 
and return this slip to Home Office at 
once, using back of same for detailed 
statement, if necessary. 



Fig. 61.- — Receiving department order. 



the invoice. In the lower right hand corner is given the item 
in the cost data to which material covered by order is to be 
charged, date of completed shipment, name of party checking 
invoice, date of checking and the voucher number. The voucher 
is very seldom used for information, as the Office and Purchase 
Record will show all that is ordinarily required. 

The "cost data" to which reference is made may be described 
as follows: 

A book is provided in which each contract is subdivided into 
various items, such as excavation, concrete forms, concrete, tim- 
ber work, doors and windows, etc. Labor and material are 
charged under these headings in separate columns, so that, at any 
time, the cost to date of ether or both may be ascertained, and 
at the completion of the work the contractor may see not only 



298 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the total profit or loss on the job, but also how the actual costs 
of the various items compare with the estimated costs. 

The "Receiving Department" copy, Fig. 61, is used on the 
job in checking material when received. In all cases the freight, 
express or cartage charges, if any, should appear on this slip 
before mailing to Home Office. This copy when received at 
Home Office is attached to the Office and Purchase Record bear- 
ing same number, and filed until the invoice has been checked, 
when it is attached to same, thus giving a complete record of 
the transaction in the voucher. 

The order file should be provided with three guide cards, 
thus: 



Order No. 2510 



Placed with James Goodnow 



Date 3/25/08. 



Completed 4/1/08. 



Cont. No. 752 



Tel. No. 2900 John 



Address 143 Libeny St., N. Y. C. 



Order hy C.A. W. 



Correspondent Mr. Goodnow 



Material Sash Cord — Nails 



Followed up | 3/28 phone \ 3/30 letter | 



Date acknowledgement slip 3/28 



Freight 



Express 



Shipment asked for immediate shipment from stock 



promised 3/29 



Complete or Partial 



Date of Shipment 



" Ship'g Papers 



Due at Destination 



Request for Tracer 



Material Received 



4/1/08 



4/1/08 



4/3/08 



V 



4/3/08 



Form 5, see other side for Memorandum. 



Fig. 62. — Card system for follow up. 



1. Marked "Ordered," behind which the Office and Purchase 
Record should be filed as soon as made out. 

2. Marked "Received." When the "Receiving Depart- 
ment" copy is returned, it should be attached to the Office and 
Purchase Record and filed behind this guide card, preparatory 
to checking the invoice. 

3. Marked "Checked." This is a final file for the Office 
and Purchase Record as soon as invoice has been checked. 

In all cases cards should be filed numerically. 

Section 1 of this file can easily be converted into a follow-up 
file by putting in guide cards of a different color from the one 
marked "ordered," and numbered from 1 to 31. Order No. 
2,510, say, was promised on the 29th. The Office and Purchase 



OFFICE APPLIANCES AND METHODS 299 

Record bearing this number is filed under the 29th and the order 
clerk in going over his records on that date will find this card and 
follow up the shipment. 

Figure 62 shows a card system for following up, which, while 
more complicated, gives far more satisfactory results. This 
card may be filed in a "daily reminder" file under date of 
promised shipment, and all information can be noted thereon 
instead of on the Office and Purchase Record. 

This card explains itself. 



CHAPTER IX 

MISCELLANEOUS COST REPORT BLANKS, AND SYS- 
TEMS OF COST KEEPING 

With the sample cost report cards given in the fore part of 
this chapter will be found reprints of a number of articles de- 
scribing various cost keeping systems. 



Construe f/o/7 Sery/ce Co. 

Contract * <4-o 

Steam Shore/ Record. 
Location S<x^U (Xcf Weather <3W^ Date /$*****■' -f<?<*i 


At? 


iYor/e. 


Vfork Oone. 


/ieg. 
Hours. 


ffeg. 
7faTe. 


e*tr* 

rtoi/rs. 


ffafe. 


7ota/. 


75-fa/ 
/1/77-fa. 


Unit 
Costs. 


/ 


Engineer 




to 


.J-o 






3,o* 




■ ea6 


/ 


Gtvtn&mar. 




/o 


•c?0 






&,eye 




.co <L 


/ 


Fireman 




to 


.20 






j5. g*> 




.oo4- 


/ 


*8r tongmsn 




/o 


.4-0 






-4,»e 




.006 


3 


P*t~mert 




/o 


./<r 






"f-.Jb 




.oof 


















/ ' co.^So 






BtecksHt'itfy 




















Incidental 




















VWa7£r.'<Ztjnp) 


f 


















fitef 


/'/z &~, Ct 


1-*£-, «e- 


+*&,.« 


<*z&^ 


•sULd 




-4.VO 


.00 g 




7br*/ 


















A^arrifit 4/f? *>f&hr>«&/ h*4<^~~. Gap. r>f BurrUtst / <z.je. 




ITP £>jp JVfavae 7ntaJ ^^f momcj is/3. 


r>jfF/9y Xj Fmno tfr C7<aus& 


tf£a~^ /ooo ^t: 






Gas/ *ss**e/ &// 1/I/&&/& 


&ap«/rs f &ist>f>//ks neectecf 



"7b fe/ aacs. **• car--pi tesu letaL tr ^n nf tzrrr or csrr-3 c.y. 

Fig. 63. — Daily report, steam shovel. 

As previously explained, it is rare that a report card for any 
given class of work will exactly meet the requirements of all 
contractors doing that class of work. Hence, the report cards 
that follow are intended to serve merely as guides. Regarding 
the cost-keeping systems, however, there are many features 

300 



MISCELLANEOUS COST REPORT BLANKS 



301 



that may be profitably adopted in their entirety by other con- 
tractors. Hence we have deemed it wise not to condense the 
original articles. 

A Cost keeping System and Its Application to Street Pav- 
ing. 1 — The accompanying illustrations show the set of blanks 
used by Kaumeier Bros., general contractors, Port Huron, 
Mich., for the purpose of keeping records of their paving work. 



Location 



Construction Service Co. 

Contract * 

Dump Train Record. 

Weather Oate 



t/?4 Vrtvght ttf Sapute. 



Ru nnGr 



Ir/p loft <Shov&/ L eft Dump Cans 



BnaJfeman 



Tr/p Lb ft. Ghoroi Left Pump CZarse, 



Engine jnspcctiect by. 



Date 



Repairs needed. 



Gand/fi'en qf engine 



Cans 



Track 



Lan&lh of hauL 



Gosj used 



QiL Htasfii nfhtir- &ufipLtei 



Mo. of Cans usadL Qap. nPnor Amur. *t. ofe mot^cgr. 



Fig. 64. — Daily report, dump train. 



-&^ 



Figure 91 shows a blank used for a daily curbing report. This 
work is always in charge of a separate foreman and consequently 
a separate report is made. Figure 92 shows the blank used for 
a daily time sheet. Stiff folders, with a loose binder so that the 
cover folds back straight, are used to hold these blanks. The 
blanks are taken out by the foreman onto the work, and when- 
ever a man is changed from one class of work to another the 

1 Engineering-Contracting, June 10, 1908. 

2 Figs. 91 to 94 on pages 323 to 326. 



302 CONSTRUCTION COST KEEPING AND MANAGEMENT 

foremen simply mark the time under its proper classification, 
and when the blank is turned in at night the number of hours 
worked is put on in ink, as shown in columns 1 and 2 of Fig. 
92. It will be noticed in Fig. 92 that employe No. 1 worked 
from 7 to 9 at plowing, from 9 to 11 in rolling subgrade and so 
on. It takes the foreman but a second to note the time, as he 
always has his folder handy. All other clerical work is done 
at the office. 



San*//*. 



Condtri/cf/ort Service Co. 

Contract * 

B/asfwq. 

Location. Weather Cafe 



m 



Work. 



Foreman. 



Loaders. 



C/ean'q Ho/es. 



Catr/if Potrdi 



Cleaning Up 



Tota/s 



Work Gone 



fi€q- 
Hours. 



fiea. 



Tota/. 



Nt Ho/es /oac fae/ q depth 



If/nd of fb»rder- % f make 4 amount 



N? of Ho/es -sprung 



Exploders 



Hind S( /V? useof 



Material needed and when 



<Supp/ies 



Kind of /7ock[ 



YSpac/ng of fio/es 



Fig. 65. — Daily report, blasting. 



Figure 93 shows the blank used for a daily report. This 
daily report is a recapitulation of all work performed during the 
day, as well as of all material received. This report must be 
filled out by the foreman each night as to the amount of work 
performed and material received. All other work, such as cost 
data, is figured out in the office. Under this method it can be 
observed each day as to whether the foreman is getting efficient 



MISCELLANEOUS COST REPORT BLANKS 



303 



work out of his men or not, and is a good way of demonstrating 
to him where they are falling behind and where an improvement 
can be made. 

The card shown in Fig. 94 is a teaming card, and one of them 
is given to each teamster. The letter "O" is used to note the 
time of arrival of the letter "X" the time of departure. The 
letter "$" is used to indicate that the team drew a load of stone; 
the letter "G" indicates a load of gravel and the letters "Sd" 



4£ 



Location 



Co/7Sfruct/o/7 Service Co. 

Contract * 
Weather Oafe 



Ghanne/er 



Ha/per 



rvrwman 



Work 



7feg. 
H6>r /ft/one Hours. 



MfeBBcSftck'?. 



Fuel 



B'sm/fh 



ToTo/ 



ffeg, 
ffate. 



Extr* 

Hours. 



fxrrv 
ffatc. 



Tbtat | Unit 
/Imrs. Coats. 



JLsnrjth nfem-r 



Depth 



^9j*- 



MinaL of ffock 



Banditha. <if 7bOBk- 



7ofo/ •sp.ft. 



iDelays from /Z gagasaa 



GttrxJ/frnn atftBOGhiaA 



GaaLused. 



J2ti- 



tffasM 



gepaJesJjJSajppliBS. nameteef 



O/httr supplies 



Fig. 66. — Daily report, channeling. 



a load of sand. In the card shown in Fig. 94 it will be observed 
that the team arrived at 7:10 and departed at 7:16, arriving 
back on the second trip at 8:04 and departing at 8:12. This 
card should be left with the teamster so that he can call the 
checker's attention to it on each trip. If this is not done the 
checker is apt to mark the card wrong, but with the teamster 
carrying the card there will be no trouble about its being 



304 CONSTRUCTION COST KEEPING AND MANAGEMENT 

marked each trip, for he will naturally be anxious to get in his 
right number of trips. 

Inspector's Daily Report on Paving. — In Engineering News, 
April 2, 1908, M. G. Hall has described the report shown in 
Fig. 95. l Each inspector was required to record the number of 
men and their occupations once an hour during the day. 



c 


Construct/on Sery/ce Co. 

Contract * 

Dril/ Ga/7<? /fecord. 

>jt A/? Locst/en Weather Date 


m 


Work. 


Work done 


S eg - 

Hours 


Hea. 

rrJffe 


fxrr* 
Hours 


Sxn-a 
Hate 


Tbral 


rota/ 
Am'ts. 


Unir 
Costs 




Foreman. 






















Runners. 






















Helpers. 






















Mucki'nq. 






















Mfijoers 






















P/'pe fittinq 






















Blacksmith. 






















iVaterioy. 






















Watcltsnan. 






















Poi'jsr STv. 














































































































Totals. 




















Oi/ cnn&ijm&d 


Make and size of machines 


Com/ ,. 


nthesr *r/spp//es 


•Oia. of&tsrT/ng OitS 


A^sr'/ needed <f mrhen 


1 ■Sp&cinq of Ho/es 
Hind r>f re>ck 1 ^ y ' 


Remarks 



Fig. 67/ — Daily report, rock drilling. 

A Flexible Cost -keeping System and Its Application to Build- 
ing Construction. 2 — Sam. W. Emerson, of Cleveland, has contri- 
buted to the science of cost keeping a description of an ingenious 
system which has great flexibility and can be applied to many 
classes of work. In some respects the system lacks complete- 
ness of detail, but when time is lacking to devise special blanks 
it has great usefulness. Mr. Emerson's description is given 
below: 

1 See page 327. 

2 Engineering-Contracting , J r une 13, 1906. 



MISCELLANEOUS COST REPORT BLANKS 



305 



The work is all done by the timekeeper, who in addition to 
his regular time-book carries a small note-book. An engineer's 
transit-book answer admirably, or books may be made up with 
ruling similar to the illustration. A number of columns are ruled 
on the right-hand page, one for each rate of wages paid on the 
job and one for the totals. 



Canst/vcf/ott Serr/ce Co. 

Contmct * 

Blacfe/n/ffr fiecotzf. 
Location Weat/ier Dote 


W~ r k 


tior/ttione. 


Reg. 

Hours. 


/Tea. 
/Taf*. 


£*tra 
Hours 


EKtm 
tfa-rr. 


7Sta/. 


Tbta/ 
Amfs. 




Dr///A,hk 


















Ganne/ef" 


















Sbpair Driffs 


















»SimShoifai 
















' 


G3IS 

u.danftau ty 


















.. cfvtnnsler 


















HaBsesMCarA 


















WpfartftJ/pt, 


> 
















Omc. Mixer 


















,. Plant 


















&!**"&/. 






















































Tofe/ 


















Cval on fianef Qua/tty. 















S--4- 



Fig. 68. — Daily report, blacksmith. 



Figure 96 1 shows the system applied to building construction, 
the cost of each class of work being kept separately on each build- 
ing. On the left-hand page is given the location and class of work. 

The timekeeper making his rounds in the morning, notes in 
the column corresponding to the proper date the number of men 
doing each class of work. Four trips are made over the job each' 
day, on each of which any changes in the distribution of men are 
noted. On the last trip the total number of hours worked on each 
class of work is put down in the proper column. 

*See page 328. 



306 CONSTRUCTION COST KEEPING AND MANAGEMENT 



The small figures in the upper and lower left-hand corners 
of the small square indicate the number of men working in the 
morning and afternoon. The large figures give the total number 
of hours worked, which, multiplied by the rate at the head of the 
column, gives the cost in dollars and cents in the right-hand 
(total) column. 



Construction Service Co. 

Contract * 

Oerr/cM /feconst 
Locat/ort Weather Oafe 


A£ 


Work. 


/leg. 
Hours- 


/Teg 
fTate. 


&xtra 
//ours. 


£t.tra 
flafe. 


Tbta/. 


7bfa/ 

A/77 tS. 


rYor/rllone. 


Unit 
Costs. 




£Tnainemar, 




















Toyman. 




















laaetBuerk\ 




















Dunhp'q •• 








































Set fine- Up 
Oernc/t- 




















7a/<ing* Down 
Oerr/cA. 




















P/aci'no 
Anchors . 
















































































fonernan 




















Tors/ 


















Guy orpeo-/ea e/err/'cA- Height Le/nptA ofpoom 


Kind of buc/retors/r/'p Capac/Yy 


M/ld of/naYer/a/ morec/ QuanhYy 




>Coa/useet 0/7 Waste 


Ot/ier supplies usee/ 







Fig. 69. — Daily report, derrick. 

The sample page shows that on April 10, eight bricklayers 
at 60 cts. one foreman at 70 cts. and 10 laborers at 22^ cts. each 
worked 8 hr. on building A. 

On the same building 10 carpenters at 30 cts. and one foreman 
at 35 cts. worked 9 hr., four of them putting in half a day setting 
window frames while the balance of the work consisted in laying 
roof sheeting. 

No concrete was placed on this date, but the cost of hauling 
gravel, moving the mixer and bailing sacks is given. The num- 



MISCELLANEOUS COST REPORT BLANKS 



307 



ber of loads of gravel hauled is stated and if any concrete had 
been mixed the number of sacks of cement used would have been 
shown. 

From the above it will be seen how easy it is with this sys- 
tem to learn the cost of special items, such as moving a mixer, 
setting up a derrick or repairing a breakdown, etc., which would 
ordinarily be merged into some general account. 



Coffsfrvcfioff Semce Co. 

Contract * 

M/x/flq Co/terete. 
Location Weather Date 


m 


tfcr/r. 


jfor/r tJonc. 


Hours. 


Keg. 

Stone. 


£xtrm 

//oora. 


Extra 
ftafts. 


**"-\J52& 


um'f 

Costs. 




Mttrf/eGMir 




















., &&ne .. 




















i, dement* 




















- Wafer „ 








































ttf/xer 




















tfo/sftrie? 




















Hthee//hq 




















f>iacing<fnd 




















Finishing 




















Sprinkfiho 




















forema/f. 




















Repairing 
RAinfhrc'r 




















Ptesing " 




















7btat 


















Baps csmenf Ci/.yds f>and Gij.yds ,<r7!hn*> 


Batches mixed .. ., mjxFtd 


trfixlur* Mind nf mi'xar Mind nf Moist 


Pfonr ivorked nn. 


fBay.v f>fr~mer,t- on hand Street on hand 


^ — — — — — — — 



Fig. 70. — Daily report, concrete mixing. 



At the end of each week the distribution book was checked 
with the pay roll. The difference between them seldom exceeded 
a dollar or two on pay rolls of $1,000 to $1,500, and even this 
error could have been avoided by checking with the time-book 
every day. 

To get the time of changes in the distribution of men, made 
during his absence, the timekeeper depends on the foremen or on 
the men themselves. Whenever convenient to figure progress, 



308 CONSTRUCTION COST KEEPING AND MANAGEMENT 

estimates should be prepared each week and unit costs 
determined. 

Weekly estimates are easily made by anyone who can read 
drawings, for brick work, laying roof sheeting, siding and earth- 
work. Daily estimates can be made with even less trouble for 
pile driving, making ties, laying pipe, curbing, pavements, etc., 
and any work which progresses in a straight line. Concrete can 



Construction Sery/ce Co. 

Confmct * 

F/pe Lay/'nq 

Location IVeofher Date 


A/? 


Wor/c. 


Hours. 


flea 
fate 


extra 
Hours. 


£*tra 
Rate. 


7ota/. 


7bta/ 
Amrs. 


Work Done. 


Unit- 
Costs. 




ExcafJre'nct 




















Ao7es 




















Sheet /s?& & 
Bracing 




















Laying P/pe 




















Hahef/7ag % 




















Calkinrs 




















Backf///*?ff 




















/famirt/n/y 




















O/slHburing 








































Af/lsc^/. 




















fane man. 




















Tote/ 


















Ltsmktftr- us^af 




f^/fia (f7o. 0/ /erra/As) Z- a/// /r/om e> 7fe <s> 


Vi*/isi*& rtytJr&nliS 


Lead Ksrn 


>Sp&c/a/ Afaferva/.<; 


Aftsem/Zanaous 


-4-<y 



Fig. 71. — Daily report, laying cast-iron water pipe. 



always be roughly estimated from the number of sacks of cement 
used. 

On large jobs, where material is handled in buckets by derricks 
or cableway or in cars, it pays to have a boy count the loads, 
and his record should show the amount handled each half hour 
as well as the total for the day. 

For the office records a loose-leaf cost ledger should be used. 
The loose-leaf ledger has many advantages over bound books, 



MISCELLANEOUS COST REPORT BLANKS 



309 



one of which is that if an improvement in the arrangement or; 
classification presents itself, the change can be made at once, 
with at worst no more -than copying a few pages. And it is 



s 


C/ass/Y/c/it/iM 


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■ 


















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* 


















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F«S 


















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/v>e/rre/9 




















Woterimy 




































































































A r o*e/rta/t 




















7bfr/ 
























Construct/on <Sery/ce Co. 

Contract A/a 7re/ic/t''n? 6y Co6/e*Yatf 
/y0fe foreman's £3a//y /fGpo/'r 


Materia/ 


faaj//*/us?itfocfaj/ 


dfttai//)/- 0/7 A/and 


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lA/fa* J/rra'** 


Coo/ 










Ot/ 










Hfoste. 




















































R//sh /b/Jqwviio /noter/tr/. rwf/h//s/i/ato/em. 










\ 












/fejtrorJks 












JVr<2t/7*r 







Fig. 72. — Daily report, trenching with cableway. 



B-io 



only by making changes and adopting improvements as rapidly 
as their merit is demonstrated that a first-class system for any 
particular business can be obtained. 



310 CONSTRUCTION COST KEEPING AND MANAGEMENT 

It will simplify the work greatly to have special sheets made 
up for this ledger wider than can usually be found in stock, say 
15 in. or 18 in. wide and having a large number of vertical 
columns. 



Ik 


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/-bremon 




















7bta/ 









































Coffsfrz/c/yar? Service Co 

Confract Mo. - . Br/c/r /%w«w/ 
/^svfe> /zosvmasTS ZJo//p ffeport. 


Afofer/a/ WJ»ai//7/-usH/jh/ M 


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/femo/Jrs 












lYeafces* 







C-J2 



Fig. 73. — Daily report, brick paving. 



The use of this ledger is shown in Fig. 97. ! All charges are 
entered under the proper heading and the totals can be obtained 
at any time by merely adding up the columns. 

*See page 328. 



MISCELLANEOUS COST REPORT BLANKS 



311 



A separate sheet is used for each class of work at each point, 

the cost, of which is wanted independently of the rest of the job. 

Thus for a bridge substructure job consisting of three piers 



M 


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foreman 




















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TfyctA of £rcai/ot//>n 


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F/m.sAer/ Mb/tf framo fos 




Length of f/otj/ . .. 






Weatfi#r 


1 





C-3 



Fig. 74. — Daily report, cement walk. 



and two abutments, five pages would be used to cover the con- 
crete work, one sheet for each foundation. 

The cost of the excavation and pile driving would be kept 
in the same way and from a comparison of these sheets valuable 



312 CONSTRUCTION COST KEEPING AND MANAGEMENT 

data would be obtained as to the efficiency of foremen and 
methods. 

In order to show the cost of work as it progresses, only 



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Fig. 75. — Duplicate punch card, steam shovel. 

materials used, not those on hand should be charged in the 
ledger. 

To accomplish this, materials are charged to suspense ac- 
counts as received, the charge being transferred to the ledger 



MISCELLANEOUS COST REPORT BLANKS 



313 



account as the material is used. To the suspense account 
should also be charged the cost of unloading and storing the 
materials. 

To illustrate: on a job where cement costs $1.40 per barrel, 
unloading from the cars 4 cts. by contract, and the cost of cement 
sheds, storing, loss of sacks, etc., is estimated at 7 cts., the cost 
of the cement sheds and all labor of unloading and storing is 
charged to the cement account. The cement as used is then 
charged to the work at $1.51 and credited to the cement account 
at the same rate. 



la 


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Construction Sen/ tee Co 

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8-10. 



Fig. 76. — Punch card, trenching with cableway. 



Other materials are treated in the same way, and at the end 
of the job any small errors in the estimated cost of unloading and 
storing can be distributed. 

Credits may be shown on the ledger when necessary by using 
red ink. 

On the completion of the job the valuable data contained in 
the ledger should be worked up into brief tables and filed away 
on cards for convenience of reference, while the ledger sheets 
themselves are taken from the holder and stored away in a 
transfer binder. 

The habit of using a card file should be cultivated as it is 



314 CONSTRUCTION COST KEEPING AND MANAGEMENT 

by far the most convenient method of filing costs records, quota- 
tions on machinery and materials, addresses of foremen and one 
hundred and one other things which will suggest themselves. 





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Fig. 77. — Duplicate punch card, quarrying. 



In the writer's experience the cost ledger has always been 
kept on the job, under the direction of the superintendent, 
where it is to be kept at the general office, report blanks should 



MISCELLANEOUS COST REPORT BLANKS 



315 



be used ruled like the distribution book. On to one of these the 
record could be copied from the distribution book and mailed to 
the office every evening. 

From the daily reports containing an exact statement of cost 
and at least an approximate estimate of the work accomplished 
the office could keep in pretty close touch with the work. 

A Cost-keeping System and Its Application to Sewer Work. 1 — 
The system of collecting cost data herein explained is that used 
by the Moore-Mansfield Construction Company and the Mans- 





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Fig. 78. — Punch card, handling crushed rock. 



field Engineering Company, associated companies, maintain- 
ing an engineering designing and general contracting office at 
Indianapolis, Indiana. The character of the work done by them 
covers almost the entire field of engineering and architectural 
construction and it has been the effort of their Mr. Moore, who 
gives his time very largely to the estimating and cost record de- 
partment of the organizations, to prepare a system which may be 
used uniformly through their work and which may be used for 
the different character of the work done, with only minor changes 
and modifications for each job. 

The essential and fundamental feature of the system depends 

1 Engineering-Contracting, Jan. 13, 1909. 



316 CONSTRUCTION COST KEEPING AND MANAGEMENT 

upon the form of the time sheet used (see Fig. 98, front view of 
time sheet, and Fig. 99, back view). 1 The time sheet is folded 
when in use by the timekeeper and carried in a cover, making the 



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Fig. 79. — Duplicate punch card, pipe fitting. 



same of book size, and practically the same form as the ordinary 
time book. On the left-hand side of the front appears the time 
sheet in the usual form. This time sheet is arranged so that it 
may be used for a gang reporting time weekly, and is also used 
x See pages 330 and 331. 



MISCELLANEOUS COST REPORT BLANKS 



317 



where the time sheet is turned in each day, in which latter case 
the lines under the column dates are ignored and the time placed 
in the total hour column. On the left-hand side appears first 











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Fig. 80. — Duplicate punch card, blasting. 

the timekeeper's check column. The instructions to the time- 
keeper on the back of the sheet (Fig. 99) are probably sufficiently 
clear, although it might be added that where the time sheet is 



318 CONSTRUCTION COST KEEPING AND MANAGEMENT 



































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Fig. 81. — Punch card, rock drilling. 



Performance : 
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Fig. 82. — Punch card, slope wall. 



MISCELLANEOUS COST REPORT BLANKS 



319 



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21 



322 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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Fig. 90. — Punch card, sodding. 



MISCELLANEOUS COST REPORT BLANKS 



323 



used as a weekly report, as is generally the case, where the gang 
is small or where the work is unimportant, the time is checked 
and divided by means of the four squares under each data and 
opposite each name, each square thus representing one-fourth 









NO. OF EMPLOYEE 














































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Cement 
















































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Loada concrete. San'd receive 
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Feet of Cement Curbln 


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utter Uid. 




Feet of Cement Hcade 


k Uld 














Ul remarks must a] 


- 


00, 






*» 















Fig. 91. — Curb report (see p. 301). 

of a day. In the case of the time sheet as illustrated, the dis- 
tributions shown are for a sewer job and the particular distri- 
butions required are shown printed in by means of a rubber 
stamp. Each distribution thereby for this job shows a particular 



324 CONSTRUCTION COST KEEPING AND MANAGEMENT 

key letter although the same letter may not mean the same thing 
on any two jobs, but reference is made to the rubber stamp head- 
ing on each contract to determine the meaning of such letter. 
In the case of the daily report of a job in the timekeeper's 



Street 


-_ . . 'Date 


-190— 




No. OF EMPLOYEE 


i 


2 


3 




GRADING 


Plowing 


7^9 

e 








Excavating 












Boiling Subgrade 


<T-ii 

2 








CONCRETE 

EASE 


Hauling & Loading Concrete Gravel 


1 










Hauling & Loading Concrete Stone 












Hauling & Loading Concrete Sand 






1 






Laying Concrete 












Hauling & Unloading Cement 










BRICK 


Hauling & Unloading 


1-6 

5 




- 






Laying Brick 




1-6 






Making Cushion 




u-ia 
4 








Hauling & Loading Cushion Sand 












Culling Bricfc 




2 








Rolling Brick 










FILLER 


Putting in Filler 




5-t> 
J 








Hauling Sc Loading Filler Sand 












Putting in Expansion Joints 










SEWERAGE 


Putting in Sewers' & Inlets 












Putting in Catch Basins 












Putting In Manholes 










SAND 


Screening Sand 










CURBING 


Hauling & Loading Gravel or Stone 












Hauling & Loading Sand 










Hauling and Unloading Cement 










SUNDRIES 


Hauling & Loading filling Gravel 
ov Sand 












Cleaning up 












General 








MACADAM 


Rolling Stone 










Spreading Stone 










Total Hours 


w 


10 








Rate Per Hour 


35 


20 






Alt remarks 


must appear on the other eide 











Cifn 






27 


28 


29 


30 


31 


32 


33 


Total 

Hour. 
























































































































































































































































































































































































































































































































1 







Fig. 92. — Daily time report, paving (see p. 301). 



check column, each principal column under the "Dates" is 
counted as 2 hr. or each single column is counted as 1 hr. Each 
small square opposite each name in such column indicates a 
30 min. check. By this means, automatically a man's time is 
In checked by 30-min. intervals extending over a 14-hr. day. 



MISCELLANEOUS COST REPORT BLANKS 



325 



using a checking system of this sort, it is not necessary to 
write the letter indicating the distribution in each square. Sup- 
pose that, in the first square in the first column, a man is checked 
in at 7 :00 as working on excavation, distribution A; no further 











190 


Wnthrr CnnJitinn A. M. P M 










CONCRETE BASE 
(Cement) 


ASKMS1 




No. Mrs. 


Rite 


TOTU 


Cost per M 


S,.Y? 


sis 


CostDcr 

urn 


No. Sacks earnest on band A. M. 






















No. Sacks cement received 








! 












No. Sacks cement csed 




















No. Sacks cem't on hand at night 








; 












No. F-mpry tacks returned 






















No. Sq. yards concrete laid 






















GBAVEL. STONE ft SAND 




















No. Cnb. yards concrete gravel 
received. 








j 












No. Cnb. yards concrete stone 




















No. Cob. yards concrete sand 
received 




















No^Cob. yards filling gravel 
received 








I 












No. Cnb. yards cushion sand 
received 






















No. Cob. yards Grouting sand 


J 


















GRADING 




















No. Loads of Dirt hauled 




















No. Loads of cobble stone hauled 




















No. Loads of rubbish hauled 


J 


















BUCK 






















No. Brick unloaded 






















No. 8q. yards laid. 






















FILLER 






















No. Sq. yards laid 






















No. Sacks cement received 






















No. Sacks cement used 




















No. Sacks cem't on hand at nigh* 






















SEWERS 






















No. Feet Tile received 






















No. Common Brick received 






















No. Feet Tile laid 




















No. inlets set 




















No. Catch Basins, completed 




















No. Manholes, completed 






















SDNDRT ITEMS 




















Amount of Coal received 




















Tools ft Bapptyei received 


















sTsjne ft No. can unloaded 




















Overhaul No. loads from and to | 
(Bute exact points.) 


























4.11 remarka must appear oo 


the otb 









Fig. 93. — Foreman's daily report, paving (see p. 302). 

letters or checks are made until this man changes the nature of 
his occupation, which we will assume is done at 10:30, in which 
case a check is made in the bottom square under the 10-hr. 
column. Suppose, in this case, the man changes his work to 



326 CONSTRUCTION COST KEEPING AND MANAGEMENT 



distribution C, indicating back fill. This distribution is then 
carried until we assume that the man changes his time again at 
3 P.M., which is indicated by the ninth column, and the letter 
F indicates that he has been placed upon the concrete gang, and 
we will asssume that he so continues until the completion of the 
day. By even a casual observance of this man's time for the 
day, it is evident that he spent 3^ hr. upon back fill (taking 1 hr. 
for noon), and assuming that the gang quit at 6:00 P.M. that he 
spent 3 hr. upon concrete, making a 10-hr. day. This system 
has been found to work satisfactorily, either upon a weekly 
report basis or upon a daily report basis, and being used uniformly 
on all contracts, whatever the size of the job or character of the 
work, the office work has been greatly simplified. 



S Job 








Team 


Date 














Haul 




















6 





2 


4 


6 


8 


10 


L2 


14 


16 


18 


20 


£ 2 


l\ 


&6 


28 


SO 


J2 


$4 


86 


S8 


40 


12 


14 


46 


48 


30 


52 


'A 


56 


58 


59 


7 












o 






% 










P 




































8 






o 








y 
















G 


I — 
































^-"N 9 
















O 






- 


- 


* 








c? 


a 




























n m ii 10 
















































\ m J 11 
































































V_/ 12 
































































1 
































































2 
































































3 
































































4 
































































V 6 
































































\ 6 


































































































i 





























Fig. 94. — Team card (see p. 303). 

On the back of the time report are shown all of the matters 
ordinarily appearing in the life of any contract. A complete car 
report is made; also items of expense and amount of cement 
used. In the latter case, the opportunity is also given for the 
dates when the cement was used and where used. On the right- 
hand side a complete report of the job is given. The manner 
in which this is done is apparent from the form given; but 
especial attention is called to the fact of the opportunity to check 
up current work with past work; and also to compare the total 
amount of work done to date. The items are printed in the same 
order by rubber stamps in the item column the same as they 
appear upon the reverse side of the sheet under the distribution. 
If the timekeeper is unable or not competent to make a report of 
the amount of work accomplished, one of the supervising engi- 



MISCELLANEOUS COST REPORT BLANKS 



327 



Inspector's Dally Report. 
















Condition of Street— dry, wet % etc 










GRADING. 


„ or nAV 


8 


9 


10 


II 


11 


2 


2 


' 


5 


' 


Tut.l 


Graders 


























On Dump 






- 










































ROLLING. 


Rolling Sub-grade 

Rollins Brick 








.., 
















Men on Roller 


CONCRETE. 






| 








































Wheelers. Concrete... 
Men on Mixer 
























Concrete Wagons 

Spreader* 








Teams— Hauling Rr<k 
Tuams— Hauling band 
Teams-Hauling Cam. 


















































.... 












































....!.„. 





















BRICK LAYING. 


Hon. 


8 


» 


10 


u 


12 


! 


1 


' 


i 


6 


Total 


WhMlti 


^ 
























































- 
















SAND CUSHION. 


M u 
































































8q. vil. Cu.hlnn made 
























FILLER. 


























Teams Hauling S. 

Sacks Cement ... 

Yd«.'S*nd 


























































EXPANSION JOINTS. 


Men. 






— 




















BUILDING CURB. 






























































































:: 




Sacks Cem 






























































Inipictrr. 



Fig, 95. — Inspector's report, paving (see p. 304). 



328 CONSTRUCTION COST KEEPING AND MANAGEMENT 

neers cooperates with him to secure this information, so that the 
report may be a complete one. 

In the matter of the office work, complete pay rolls are pre- 



Tuesdery, Apr. 10-06. 



Buildinqr "A' 



Brickwork. 



Bricklayers 



Laborers. 



Carpenter Work. 



Sheeting' 



Setting Frames. 



Building' "C" 



Concrete. 



Hauling? Grave/ (74 Loads) 



Moving Mixer 



Bailing' Sacks (Finished P^PM.) 



Bui ldincf "D' 



Excavating; 



■Superintendent. 



Timekeeper - Waterboy 



Left Hand Page. ffig-ht Hand Page. 

Fig. 96. — Timekeeper's book, building work (see p. 305). 



A,B&C Shops. Concrete Foundations. — B/dg^s. 


Date 




Cm 


m 


5ar 


d 


Sf<?. 


le 


For 


*n 


5m 


Jik 


5 




Em 


tin 


iFcr 


vs 


Mm 


™, 


fix 


m 


Tea 


vs 




1 


























•iai 


Fut 


1 






P/a 


H 


Lab 


?r 






















































































Apr.?4 


Pay Poll Apr. /3- 19 






























m 


50 


190 


W 


80 


75 


4Z 


00 














n 


Cement. 300 bbls. 3> 1.5/ 


453 


m 






















































>• 


Stone 300 cu. yds. Si/. 00 










300 


Oil 














































n 


Sand l?0 •• » SI 0.60 






7E 


00 


















































it 


Lumber /0 M 51 S0.0O 














?00 


f 










































Apr.E6 


6"Be/t 30'a)0.20 


















6. 








































May? 


Pay Pol/ Apr. E0-Z6 






























140 


00 


l?5 





95 


50 


?l 


10 
























































































































































































































































































































































































gNG.-CSNTn.- 



























































Fig. 97/ — Loose leaf ledger sheet (see p. 310). 

pared from the time sheet side and the cost of the work is posted 
in the cost record book. This cost record book, however, is not 
essential, but only as a matter of permanent record, as the sheets 



MISCELLANEOUS COST REPORT BLANKS 329 

themselves show total cost to date at all times of each item of 
work. 

This form of timekeeping would be of value because of the 
system of uniformity alone, even if no regard were given to the 
other features mentioned, although the above companies using 
this report are satisfied that they are securing more valuable data 
by this form than they would have ever been able to do by 
previous forms used. The value of the uniform time sheet lies in 
the education of the timekeepers, resulting in a more efficient 
working force. Under the old system with individual time sheets, 
prepared especially for each job, the forms of the time sheets 
were many and various, and, for this very reasons timekeepers 
presumed to incorporate their own ideas and make changes and 
innovations, resulting in a bunch of data that required hours, and 
generally the personal attendance of the timekeepers, to work out. 

Passing from the time sheets, Figs. 98 and 99, pay rolls, Fig. 
100, and the cost record book, the next feature of the system 
of information or cost data consists of progress charts. These 
of course, will vary with any job according to the character of 
same, and, as they are used by nearly every large construction 
company, it will only be necessary to say that blue prints are pre- 
pared (generally blue line prints) upon which the timekeeper 
is able to color in the work completed each day of the week, 
marking dates thereon and turning such charts into the office. 
These progress blue prints thus form a permanent record of the 
progress of the work and also form the basis for the determination 
of the amount of work accomplished from time to time. 

In connection with these progress charts, however, Mr. Moore 
has a unique summary progress chart upon which is carried 
forward and maintained a continuous record of the job, the 
information being obtained from the summary report of the 
time sheet. One of these summary progress charts is shown by 
Fig. 101. The essential idea of this summary progress chart is 
to have at all times a condensed, complete history of the work, 
not so much with reference to the detail unit cost of each item of 
work, but more especially with reference to a comparison between 
the estimated total cost and the actual total cost. This com- 
parison allows an intelligent idea to be made of the portion of 
the work done, and indicates at once whether the actual cost 
is less than the estimated cost or exceeds it. The general form 
of this summary sheet is a standard, but of course will vary 



330 CONSTRUCTION COST KEEPING AND MANAGEMENT 







S 




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MISCELLANEOUS COST REPORT BLANKS 



331 





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332 CONSTRUCTION COST KEEPING AND MANAGEMENT 



;ipt 
site 
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MISCELLANEOUS COST REPORT BLANKS 



333 



with each job as to the number of items making up the complete 
contract. Referring to Fig. 101 the chart illustrated is being 
used in connection with a sewer contract, and a brief description 
will be given of the manner of the use of this chart. In this 
case, the sheet is ruled so as to cover two classes of work only; 
namely, excavation and concrete. Under each one of these 



Section A. 



Excavation 



Unit 
Cost 



Ena-Cant* 
Fig. 101.- 



lOO\\tkS 



as 

m 

25. 

m 

55-2. 
52 

41 

40 



Concrete 



Est 
Cost 



j2 



Act. 
Cost 



Jl 



Unit 
Cost 



-Progress chart (see p. 329). 



headings, the first column is a percentage column. In using the 
sheet, the length of the section is plotted in the column marked 
length so that the complete length corresponds to the 100% line; 
the same is done with the estimated amount of cubic yards of 
material to be handled corresponding to such length. The esti- 
mated cost is then plotted in dollars, the total, however, being 
made to correspond with the 50% line in the percentage column. 



334 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Now, as the work proceeds, the actual cost is plotted on the 
same scale as the estimated cost and shows at all times the relative 
proportion. No matter what the total length of the job or the 
total length to be handled, if the scale upon which same is 
plotted is so made that the length corresponds with the 100% 
line, the general manager is able to tell, at all times, just where 
any one section of the job stands. For instance, on the chart used 
for section A of the sewer, above mentioned, the 100% line 
equals in the length column 1,265 ft. = 3,186 cu. yd. = an 
estimated cost of $733.00, the latter point being opposite the 50% 
line. Now, for instance, on the first day of August, the actual 
feet of sewer constructed was colored in the length column as 
about 610 ft.; immediately upon the percentage scale line, we see 
that this amounts to about 47%, and in the yardage column, this 
gives us 1,550 yd. Upon the estimated cost scale the amount 
to be expended for this amount of work was about $375.00. As 
an actual fact in the case mentioned, the actual cost to the date 
corresponded exactly to the amount of $375.00. At once, by 
casual observation, the general manager or superintendent is 
able to tell from very meager information just where the job 
stands. Given the length, the cubic yards and estimated cost for 
the section may be read off the chart and the actual cost com- 
pared. If the record is made in number of cubic yards, and so 
plotted, the corresponding length may be read off. In either 
case, the percentage of completed work may be compared with the 
percentage representing the actual cost and in turn compared 
with the percentage indicating the estimated cost 

The chart is also of great value on any section, especially 
where the work is of a character that is continuous in its opera- 
tion and continues in the repetition of certain units of work, in 
that the timekeepers or superintending engineers can read 
directly from the chart the data necessary to complete the report 
of work done on the reverse side of the time sheet. 

In the particular chart shown, various lines were also drawn 
for unit cost, so that at various times during the progress of the 
work, the fluctuating unit cost might be readily compared. This, 
however, is not essential, and, in fact, it is but seldom used. 

In connection with the particular sewer job referred to above, 
in as much as the sewer itself was of various sizes and to be 
built under varying conditions, the general progress blue print 
was made as shown by Fig. 102. Attention is called to the 



MISCELLANEOUS COST REPORT BLANKS 



335 



fact that each individual size of the sewer or change of condi- 
tions is indicated as a section and all reports are made upon the 
basis of such sections. Where the general character of the 
work is the same, and the. work is to be handled by the same 
methods, a letter is used as indicating a general division and 
numerals added to indicate the sub-sections. 




EngrGont/: 



Fig. 102. — General progress blue print. 



The costs of work, however, and amounts of work accomp- 
lished are kept by sections and sub-sections, so that when the 
job is completed the cost of each size sewer under the conditions 
met with can be readily determined. In the particular case men- 
tioned, the principal item being excavation, concrete, or pipe, 
the summary progress charts as just described are kept only on 



336 CONSTRUCTION COST KEEPING AND MANAGEMENT 



these particular items of work, although the miscellaneous items 
of work always appear and are carried forward upon the time 
sheet distribution and reports of work done. 

The particular contract referred to above consists of about 
seven miles of main sewer, of which four miles is all concrete 
construction, three miles of pipe work, and there are also some 
four miles of miscellaneous pipe work, making in the aggregate 
eleven miles. The same system of cost recording is being used 
at this time to keep in tab with the construction of bridge work, 
the construction of a boulevard, embankment work, and also 
for the construction of several reinforced concrete buildings. 

(The blank was 8^ in. long by 5% in. wide. In the 
reproduction words in italics and figures are shown to illus- 
trate use of blank in a specific case.) 

Cost Keeping on Sewer Work. 1 — Mr. Keith O. Guthrie has 
contributed an excellent article, which we reproduce here: 



Foreman's Daily Pay Roll Report. 
Location.....? 4th Avenue No. 2 96" Sewer Da.te,....August 7, 1907 

Itemized Pay Roll. Work Done. Pay Roll Distributed 



Foreman 1 days at 
Engineer 1 
Labor 1 

274" 

11.8" 



Carts 1 

Teams 2-10 
Hoister 1 
Water boy 1 



Total day's pay 
roll 



00 
60 
00 

76 
1\60 



300 

6\00 

200 

76 



General Night Watchman and Water Boy 

Excavation completed to station 18,40 Cost 

Sheeting " " " 18.30 

Foundation pl'nk" " " 18.00 

Backfilling " " " 16.90 

Sheeting Pulled " " " 17.10 

Concrete Invert " " " 

Brick Invert " 

Concrete Sides \ " 17.48 

Concrete Roof J " " " 

Steel Bars set " " " 17.48 

Forms set to station ....17.48 

Forms, Pipe laid to station 

Manholes built to-day - 

Other items Pump 

Teams working Cement 17.48 



Carts working Gravel 17.48 

Total day's pay roll 

Signed L. — W. Foreman. 



25 



Fig. 103. — Cost keeping on sewer work — blank for daily report of foreman. 



The report cards, Figs. 103 and 104, were designed to gather 
detailed cost records from scattered sections without increasing 
the ordinary clerical force. They have been used on a large 
sewer contract in charge of the writer, producing records in 
handy shape for daily and semi-monthly comparison, easily 
compiled into compact totals for future reference. The entire 

1 Engineering-Contracting, Oct. 23, 1907. 



MISCELLANEOUS COST REPORT BLANKS 



337 



extra expense of the working system has only amounted to the 
first cost of printing. 

It is common practice, and properly so, on cost reports to 
print the desired items of distribution and adhere to them 
throughout. Otherwise it is the tendency to increase the number 
of special items ad infinitum, making comparison difficult. 
However, on these reports, three extra lines were left to cover 



Foreman's Daily Material Report. 
Location....^ 4th Avenue No. 2 96" Date, August 7, 1907 '____. 










84.... 






160.... 










Total .. 


244.... 
















156.... 




















.. 1 


167.... 














87.... 














7.... 








157.... 










Total 


164.... 








140.... 










24.... 








Materials received. 


From. 


1 

47- 


Amounts. 

-4x6—16 
-4x6— U 

\" roofers 

-1—15 ft 
-\ — 19-it 
-| — SC-ft. 


-ft 






. ..12- 


-ft 




E. N. 


. ..1120' 






....Car No. P RR 72S4 


. 120- 








.. 120- 








75- 




Sheeting and bracing left in 










L. W. 













Fig. 104. — Cost keeping on sewer work — form for foreman's daily material 

report. 

special conditions, such as pumping, laying sub-drain, etc., occur- 
ring only on one or two sections. It is often difficult to secure, 
on daily reports an accurate statement of the amount of work 
done. This is easily obtained on sewer work by referring every- 
thing to the stations or "grade-boards." This method obviates 
everything and the daily distances check up when totaled for any 

period of time. Indeterminate items, like teams, can be arbitrar- 
22 



338 CONSTRUCTION COST KEEPING AND MANAGEMENT 

ily coupled with some suitable item, such as Excavation or 
Arch. 

To get an accurate distribution of a pay roll it is necessary, 
of course, to have the amount of the pay roll. That the foreman 
may find this readily, and, in part as a reminder, the different 
classes of labor are tabulated on the left. 

Toward the end of the day the foreman first jots down the 
stations of completed work, then from his time-card, having sim- 
ply the check numbers, rates and hours worked, he draws off his 
day's pay roll, finding it to be, as in the case taken, $83.10. He 
now distributes first the minor items, which is readily done from 
memory. For example, the Bracer and his three helpers worked 
on " Sheeting;" the two men on " Blackfilling " car; the three who 
"Pulled Sheeting" for 5 hr.; the two bending and setting "Steel 
Bars;" the two carpenters and one laborer on "Forms," and so on, 
until there is left only Excavation and Concreting. As a rule 
the men who have been in the ditch can be readily counted up, 
and Concrete Invert, or Arch, gets the balance of the pay roll. 
The last item, of course, gets some of the odds and ends, but that 
is better and far safer as a basis for future estimating, than heap- 
ing them into a "Miscellaneous" item by themselves. 

These reports are daily collected by the general timekeeper 
and checked up by him as to correctness of pay roll amount. 
They can then be used for comparison between different sections, 
or between different days on the same section, without further 
tabulation. At the end of a half month it takes not more than an 
hour to foot up the totals of a section and post on the same card, 
which is then ready to file in a card cabinet as a permanent 
record. 

The "Material" report, Fig. 104, was gotten up to catch the 
elusive cement- empties and to follow the quantities used on 
different parts of the sewer. By checking with the storekeeper's 
records, the loss of bags or waste materials can be learned soon 
enough to take advantage of it. 

Cost-keeping Blanks for Building Construction. — We are 
indebted to the late Chas. J. Steffens of New York City 
for an excellent description of a simple system which is sus- 
ceptible of wide application. It appeared in Engineering-Con- 
tracting, July 4, 1906, and is given below. 

The Guarantee Construction Company use on their small 
contracts a form of report, illustrated herewith, Fig. 105, which, 



MISCELLANEOUS COST REPORT BLANKS 



339 



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340 CONSTRUCTION COST KEEPING AND MANAGEMENT 

essential information for a detailed cost record. The report is 
of course sent to the office daily. 

The first column gives the number of men, the same hori- 
zontal line being used for all men receiving the same rate per 
hour. Thus, in the report illustrated, there were 16 men at 
17^ cts. per hour, distributed as follows: Excavation, 55 
hr.; forms, 10 hr.; concrete, 95 hr. The total hours at this 
rate are shown at the right of the sheet, namely, 160 hr.; 
the rate, 17^ cts., making a total cost, for this rate of wages, of 
$28.00. 

The men paid at other rates are entered in a similar man- 
ner and the vertical column of totals is footed up. The hori- 
zontal column for totals, near the bottom of the sheet, shows 
the cost for the day of the various parts of the work, as, for 
instance: Excavation, $9.61; concrete, $30; forms, $8.66; etc. 
This column is also footed up and the two footings made to 
check. 

In the column of "Cash Expenses of Today "appear all such 
items as carfare, etc., which the foreman pays himself. These 
are entered in the vertical column to which they are chargeable, 
as, for instance, in the case of twine secured for use in construc- 
tion of the forms, the cost of twine appears under forms. These 
expenses are footed up and added to the total already found, 
giving the grand total as shown. Upon this daily report must 
appear all charges for which the foreman expects to receive 
payment on the fortnightly payroll. 

When the report reaches the office it is immediately checked 
to ascertain if it is correct, and if so the proper entries are made 
on the daybooks under the contract covered by the report. 
Thus on Tuesday afternoon our books show the cost of each 
contract or of any particular item of a contract up to the end 
of Monday's work. 

All material is ordered by the triplicate order system, by 
which three copies of each order are prepared, one being for- 
warded to the firm from whom the material is purchased, another 
sent to the foreman on the work, and the third retained for an 
office copy. 

As soon as material is delivered on the job the foreman checks 
such material and if he finds it correct sends the copy of the 
order which he holds back to the office, marking it O. K. and 
giving the date on which material was received. When this 



MISCELLANEOUS COST REPORT BLANKS 341 

while requiring but little time to prepare, yet supplies all the 
returned copy reaches the office, the material covered by the 
order is at once charged against the contract under the proper 
distribution of forms, concrete, etc. 

The books in which these cost records are kept are of the 
loose leaf type. A number of the pages are headed with the 
name and number of the contract and one page is allowed for 
each item of distribution and is headed forms, concrete, etc. 
Should more than one page be required for any item the addi- 
tional sheets may be inserted at any time. The pages are ruled 
with a column at the left for the date, then a head space for 
the description of the order. Beyond this is. a column for the 
order number and two columns, one for entry of cost of mate- 
rial and another for entry of labor cost. The manner of ruling 
these pages is shown above. 

At the end of each month, or whenever desired, these col- 
umns may be footed up showing the cost up to the previous night 
on any item of distribution of any contract and subdividing such 
cost into material and labor. A monthly data sheet is prepared 
for each contract showing the estimated costs of the various 
items and the actual cost to date. At the completion of the 
contract another sheet is prepared showing the estimated costs 
and actual costs as well as the estimated unit prices and the 
actual unit costs. 

In connection with these reports another form is used which 
is also illustrated herewith, Fig. 106. This has, as will be seen, 
spaces provided for reporting material received, material re- 
quired, material which the foreman has found it necessary to 
order and such other information as he considers it advisable 
to communicate to the office. 

The report blanks are furnished to the foremen in the form 
of pads with alternate sheets punched with small holes along 
the top close to the binding. These sheets are torn out and sent 
to the office, while the next sheet, on which a carbon copy of 
the report appears, remains in the book or pad for the foreman's 
record. 

It has been found that the use of these reports with spaces 
provided for the above purposs will tend to call to mind the 
various matters when the foreman prepares his report in the 
evening, and matters which otherwise would be forgotten are 
called to the attention of the office. 



342 CONSTRUCTION COST KEEPING AND MANAGEMENT 



GUARANTEE CONSTRICTION CO. 

NtW YORK CITY 
, o h T6S~ Date £/l-~2-/<rt> 

The following materiar received to-day ^ ^~0<^~d^Z^ (n^ ^ P^e^ir^ 



Please order the following material: /3 <?C<>]f /*-<fr7 ^.rtsf"*, I^-O^C f. 



~w 



^_ *f± 



Please hurry material covered by requisition No. — / ' ■ / ^7 ( ? ?/ 



I have ordered the following material to-day: 



MATERIAL ( 


Obabqc to 


) Naue of Firm 


PH.C 


SJj^UL^^ 






~£ 


36 











































Do not report on thit ehect the purehaac of any material vou have paid for. 




■— & Cf^lA^tO <x_ 4^ . 






'.-C<a<-g, Of- 




aj°.JC. 



Fig. 106. — Material report. (Actual size 6\i X 13 in.) 



MISCELLANEOUS COST REPORT BLANKS 343 

The Cost-keeping System of the Aberthaw Construction 

Co. 1 — The following is an abstract of an article by Leonard 
C. Wason, president of the Aberthaw Construction Co., of 
Boston. 

In order to have an intelligent understanding of the meaning 
of the figures hereinafter given, the method of collecting data 
will be described. When making up an estimate of the cost of a 
building, in scaling the plans, it is found convenient to take off 
the volume of excavation and backfilling, the cubic feet of 
footings, foundation and wall, the square feet of forms for walls 
of foundations and above grade, the lineal feet of belt courses, 
moldings, cornices, etc., also the size of special features of ex- 
terior treatment. Similarly the superficial areas of column 
and floor forms are measured by themselves. Concrete of each 
different mixture is scaled off in cubic feet and totaled separately. 
Steel of each kind is taken off in pounds; granolithic finished 
surfaces in square feet, and so on in detail every item is measured. 
As the work progresses it is desired to know weekly how the 
actual experience compares with the estimate and at completion 
to compile correctly the costs of each item to compare with 
estimate and to aid in obtaining the true cost of future structures 
of a similar kind. The method of accounting was developed to 
fit the estimate. 

In the year 1898 daily time reports were designed having a 
number of columns for ease in sub-dividing the time of the work- 
men. At the head of each column the timekeeper puts index 
numbers or letters to show the kind of work being done, and 
below, the actual time the men worked. On blank spaces at 
the extreme right of the report the timekeeper inserts in writing 
the amount of each kind of work done and the amounts of the 
principal materials used. The experience of eight years has 
required no change whatever in the principles first adopted. 
The only change in the forms has been to increase the number 
of vertical columns so that a large number of sub-divisions can 
be used without troubling the timekeeper to re-write the names 
on another sheet. At the present time ten vertical columns 
(Fig. 107) are used for recording time, with the names of the 
workmen at the extreme left, two columns being left at the 
right for the rate per hour and the total amount. At the begin- 
ning of a job written instructions are given as to how the work 
1 Engineering-Contracting, Jan. 13, 1909, and March, 1906. 



344 CONSTRUCTION COST KEEPING AND MANAGEMENT 

is to be subdivided into items in the reports. A standard method 
of classification has been adopted as follows: 

The principal sub-divisions are given a capital letter. Thus, 
everything whatsoever relating to concrete masonry is given the 
index letter M; excavating of all kinds, including work incidental 



Job No. 747 Location. Attieboro. Mass. Albertbaw Construction Co.. Bobton 
Date. Aug. 1. 1006. Daily Report 


Name of Workman 


Time 

on 


Time 

Maef 


1 
Time \ Time 
Maewj Maec 


Time. 

Maof 


Time 
Maow 


.Time 

Mef 


Time 
Mtaf 


Time 


Tine 

Meow 


Oppiob 

Rate 1 Amt. 




Put at head of proper column or 
against each name index of work 
performed. 


1 Closby Foreman...! 61 \ 




| State each kind of work done. 
SO 00 1 | 5.28\ Amount of Cem. and Materials used. 


9 Maclntire . ..j »1 


















IS 00 1 12 64| Weather 


S Cook. John I 91 


















41 1 IS *9I Temperature: 7 *. M. 


4 Angvn'ne I 




S 1 






a 








S7j| Maef \ 19.38\ 1 p. u 


6 Blanthard I 


7 


2 1 














37,|Moeu;| 494S\ 5p.m. 


6 Cameron. . . .1 




9 1 














.28 1 Maec I 3 11\ 


7 Clough | 


7 


1 £ 














37)1 Maof | 3 «7| 


8 Cook, James.. . . I 


i 






S 










41 \Maom\ 9.03\ 


9 Dunne | 






3 


6 










S7H Mef | ;/ 41\ 


10 Dupont. | 


S 


4 1 














37JI Meaf \ 12 .S4\ 


11 Emmons . .| 




s 1 






4 








.3711 Ceak \ S .88\ Ceak~ Motor Shaft. 


12 King ..... | 




9 1 














.3711Afuo!u| S.S1\ 


13 Lambert.. \ 




4 1 




S 










371Ufeat»| «.75| 


14 Lemini I I 1 3 I ; I 1 I 5 I 


\Water-\ 1 
2S ( boy | .501 M«f 630 c. f. 


15 Lovejoy '| \ \ \ \ III 


3711 \1304e\Meaw4e " ' U«"lM 


10 O'Connell t 1 6 


9 | S 












3711 


1 " 11.6 - (10 ") 


17 O'Hara i 16 


1 3 












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1 " 11 " («/ " ) 


18 Parrus . I \ 9 














.28 | 


1 


19 Peterson I I 


9 1 












34 1 


| 140 bags cement used. 


20 ProulT. | | 


9 1 












.3711 


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21 Robarge ( \ 9 














3711 


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22 Sanford... .'... I 1 


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24 Steeves! I I 


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25 TunibuU. 1 1 


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26 Vclegnette. . . I I 


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27 Riley I 








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28 Phelan.. ....... I I 










94 




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29 Martin. ... I 1 


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.20 1 


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31 Spenser . I | 


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32 Lawson . . I I 








1 9) 






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.0681 






36 71 | 1 


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44 6S4 .| | 


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Work performed. Ill ' 1 1 Approved 
1 [ ... I . _.*i 1 1 'J i r 1 1 1 II 



Fig. 107. — Daily time report. 



thereto, the letter D; all work connected with plant the letter P, 
and so on, there being only six or seven sub-divisions to indicate 
every building operation. To indicate the kind of work vowels 
are used. Thus, the vowels beginning with a all relate to form 
work, as: a, centering complete; when done by separate opera- 
tions aa is making, ae is setting, ai is straightening up or bracing, 



MISCELLANEOUS COST REPORT BLANKS 345 

ao removing after being used, and au cleaning up and handling 
ready to be used again. All labor connected with mixing and 
placing concrete or with handling materials for same goes under 
the head of e; all work in connection with plant, receiving, erect- 
ing, taking down, shipping and repairing, is indicated by the 
vowel i. Thus i means receiving and setting up plant ready to 
work, ia taking down, removing and shipping, and ie repairing. 
The consonants are used to indicate different parts of a structure 
in which certain work is done. Under classification M, b stands 
for footings, C columns, d foundations, / floors, g stairs, etc. 
Under classification P, f stands for boiler, g for horizontal engine, 
h for vertical hoisting engine, I for elevator, m for mixer, etc. 
Thus our timekeeper places at the head of a column when he is 
reporting concrete floors, for the placing of forms Maaf, for 
concrete Meaf. If a mixer is being set up ready to work the 
report would read Pirn and later if it was repaired it would be 
reported under Piem. 

This is not so complicated to use as it may appear to read, 
and experience has proved that every man who knows enough 
to keep time can use the system with a few days' experience. 
The principle is to make the least amount of clerical work to the 
timekeepers on the job, as they have plenty of other work to do. 
In addition to sub-division of time as above set forth, it is the 
duty of the timekeeper to report the number of barrels of cement 
mixed in a day, which is usually done by the man in charge of 
the mixer counting the empty bags, and in addition the actual 
volume of concrete measured in place. From this, knowing the 
proportions, it is a very simple matter to obtain the amount of 
sand and stone used and also to see if the right amount of cement 
is being used. 

Carpenter work on forms is reported by the number of square 
feet of surface in contact with the concrete erected. Thus walls 
are measured two sides without deducting doors and windows, 
as it is usual to let the form work run straight across these unless 
it is impossible on account of mouldings, in which case the 
framing of the opening will cost as much as the form work 
omitted. Beam floors are measured around the perimeter of the 
beam and the flat surface of the panel and around the perimeter 
of girders. No deduction is made for the loss of area by the 
intersection of beams and girders, and small openings in the 
floor are not deducted. Anything as large as an elevator or 



346 CONSTRUCTION COST KEEPING AND MANAGEMENT 

stairway is usually deducted. Form work for columns is meas- 
ured for entire area of surface contact between wood and cement, 
all four sides. 

These reports are made out on the job daily and sent to the 
office. The bookkeeper works these reports up into units of 
measurement, as cost of labor per cubic foot of concrete and 
number of cubic feet of concrete per barrel of cement, number 
of square feet of form work erected, etc., and from this it is 
easy to obtain the unit costs hereinafter given. The bookkeeper 
can take the reports of four or five jobs, employing in the aggre- 
gate 500 or 600 men, and in a single day work up the complete 
report for a week's time; thus it will be seen that there is really 
little extra labor involved in the subdividing of reports into a 
useful form over merely reporting the time so that the pay roll 
can be accurately made. 

The system employed has appeared of sufficient value to 
others to warrant its being briefly outlined in Gillette's "Hand 
Book of Cost Data," pages 14, 15, and 19, and a description of 
it also appeared in Engineering-Contracting of March, 1906. 

Materials received on the job are reported on cards especially 
printed for the purpose, listing the principal materials which are- 
reported, in order to save work of the timekeeper in reporting 
materials accurately. 

When a job is entirely completed and the ledger account is 
closed, a master card is worked out giving the complete history 
of the cost. On one side of the card are written the items 
which went into the original estimate, such as excavation, back- 
filling, footings, foundations, columns, floors, walls, stairs, etc., 
etc. In parallel columns are placed the actual amount of the 
estimate with the actual experience, reduced to cost units, such as 
cubic feet, square feet of form work, etc., and the percentage 
of profit or loss between the estimate and actual results. On the 
reverse side of the card the principal items are worked out 
more in detail. Thus form work is reduced to cost of labor, 
lumber and nails, wire or other sundries used in the forms per 
square foot of surface. Concrete is itemized into the superin- 
tendent's general labor, labor of mixing and placing, cost of 
cement, sand, stone; miscellaneous expenses such as teaming, 
plant and other general items, reduced to cubic feet measure- 
ment, which makes the total cost of the concrete in place in each 
division of the building itemized for ready reference when making 



MISCELLANEOUS COST REPORT BLANKS 347 

up future estimates on work of a similar character. An example 
of this form is given by Fig. 108. 

It is well known that the costs of materials and labor in differ- 
ent parts of the country vary somewhat. Having the unit 
items all sub-divided, as above stated, into their elementary parts, 
it is an easy matter after determining the cost of materials in 
any locality to make the exact corrections to the results obtained 
on a previous job. Similarly, when a difference in the rate per 
hour for wages is known, if the same efficiency is obtained from 



Job No. 747. 

Date May 24th. 1906. Mill, Tappan Bros., Attleboro, Mass. 

Proposal. Cost. Per. Cu. Ft. Profit! Loss. Ct. 

Total $35,164.55 $31,330.48 $3,834.07 $ 11 

Excavate 790.00 823.18 .021 33.18 .. 

Footings and Fr 1,738.00 1,033.57 .137 704.43 



Per sq. ft. 

Exterior walls 1,955.00 2,162.02 .190 207.02 

Wall and Fr. centers 1,520.00 3,630.08 .125 2,110.08 

Floors, 6%" thick 8,883.00 6,542.16 .339 -2,338.84 

Roof 5 Vi" thick 2,869.00 1,713.51 .237 1,165.49 

Per 1. ft. 

Columns, 20x20" 832.00 676.65 1.470 155.35 

Stairs . 883.00 910.35 .912 27.35 

Per sq. ft. 
Tool surface 469.00 636.53 .056 



Ornaments and cornice 348.00 164.33 183.67 

Ventilators on roof 44.00 35.64 8.36 

Each. 

Set windows and door frames.. 852.00 729.99 2.19 122.01 

Per sq. ft. 

Interior partitions 1,770.25 1,656.35 .189 .133.90 

Bolts and iron work 253.00 257.06 4.06 

Stair railing and grill 387.00 654.00 267.00 

Per M. 

Screens and setting 1,086.00 835.12 52.17. 250.88 -. 

2" Spr. plank and laying 2,839.00 1,431.69 33.30 1,407.31 

7-8"Maple plank and laying 1,738.00 1,788.88 89.44 50.88 

Motor shaft 379.50 533.19 98.89 153.69 

Motor shaft found 98.00 70.07 27.93 153.69 

Roofing and conductors 1,255.00 1,026.06 288.94 

Per sq. ft. 

Paving 1.009.00 647.54 .094 361. 4rf 

Retaining wall — . 

Centers, per sq. ft .211- 

Concrete, per cu. ft 429.00 316.90 .175 -112.10 

Painting 400.00 375.00 .... 25.00 

Steel footings and walls 300.0C 218.91 .... 81.09 

Plant fit., etc 1,860.00 2,271.73 411.73 

Bond 100.00 120.00 20.00 

Extras 77.80 67.97 .... 9.83 



Fig. 108. — Master card giving summary of cost. 

the men it is very easy to make a correction, or if the efficiency 
varies, judgment must be applied to determine the correct rate 
to use. It has been the writer's experience that although the 
rate of wages and cost of materials vary somewhat in different 
parts of the country, the variations frequently offset one another 
so nearly that the sum total of the unit cost obtained in one 
place may be used in another, very seldom needing correction. 
For instance, within one month, after careful investigation, a bid 
was made up on a structure at San Juan, Porto Rico, using the 
same unit costs as for a building in Boston. 



348 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The following appeared originally in Engineering-Contract- 
ing, March, 1906: 

We give here a full set of the record blanks used by the 
Aberthaw Construction Co., of Boston, builders of the Harvard 
"Stadium" and other reinforced concrete structures. 

The Aberthaw Construction Co. requires its foremen to make 
daily reports on cards. The foreman has a time-book (printed 
especially for the Aberthaw Construction Co.), week ending 
Thursdays, leaving additional space sub-divided. This time- 
book is his original records which he copies on the daily report card. 
The foreman does not enter the rate of wages on the card; that is 
done in the office, the idea being to keep the clerical work of the 
foreman down to an absolute minimum. On large jobs the time- 
book is kept by a time-keeper; but with less than 20 men the fore- 
man keeps the time. 

The standard size of report card is 4 by 6 in. These cards are 
printed on heavy paper, which weighs about 1601b. to the ream of 
500 printed sheets, each sheet measuring 25 by 38 in. Cards of diff- 
erent are used to assist in rapid and certain classification. For 
example, the daily report cards, Fig. 109, are printed on yellow 
stock and on green stock. The yellow cards are used for the 
regular contract work, and the green cards for extra work. All the 
reproductions of the cards shown herewith are three-quarters the 
actual size. 

The blank is printed on the back of the card just as on the front 
except that the Job No., Location, Date, etc., are not repeated. 
Hence on the face and back of the card there is room for the 
names of 27 men. It will be noted that this particular day's 
record related to concrete work, namely the building of a rein- 
forced concrete fence. The number of bags of cement used 
in each class of work is recorded, opposite the corresponding 
number of "beams," "bases," "shafts," etc. On the back of 
the card is given the "Index" letter for each class of concrete 
work. For example, we see that the "Index" for "beams" is 
BE. We see, on the front of the card, that workman No. 3 
worked 9 BE, that is, 9 hr., on beams. We also see that he 
was a carpenter, for his time is entered in the column for car- 
penters. We see that he was paid 30 cts. an hour. In the 
column headed Am't., is given a summary of the labor cost of 
all the carpenter work done on "beams" (BE), "shafts" (S), 
"bases" (BA), etc. In the similar column on the back of the 



MISCELLANEOUS COST REPORT BLANKS 



349 



Job No. 37<? Location A&&6<l&U> &&e>&/ ABERTHAW CONSTRUCTION CO., BOSTON. 
Date <^e/ud. 2C 190<? Dally Report 



Name of Workman 



1 UfiovnC 



d/e*u&Ao- 



^7 



T 



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& 



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e ./ss^&rt^ 



^Jtf^^uz^/ 



^^H^, 



.-< 



<-^U4A^/ 



\3</?&ZxUp- 



TimeTTime 
CJrp, 



Time 
Concrete 



£ 



i! 



r 



€ 



I 



BE 



I 



3£ 



BE 



£ 



BE 



,BA 



£ 



BA 



6 



6 



f- 



Time 



/o 



Time 



Rate 



J H.O? 



o.3c 



■* 



2.n 



0.3o 



am 



aw 



a 3c 



0.2s 



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M0 



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P 



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ma. 



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Til 



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53$ 



Put at head of proper colun 
name Index of work perform 



State each kind of work done. 
Amountof Cam. and Glass used. 



t/4<s£~ < 



( &e*yve*t£~ 



£ ■&&&*>**> 



JL 



cP&ze-t. 



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a/ 



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a' 



Approved 

BBWfea tnDc w ro. co.. no e ncoTcn 



Front of daily report. 



Name of Workman 



14- 



Time Time 
• Carp, 



Time 
Concrete 



f- 






Time 



Time 



Rate 



&£T 



■71 



mffi 



Am't 



& 



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Fig. 109. — Back of daily report. 



350 CONSTRUCTION COST KEEPING AND MANAGEMENT 

card is the summary of all day labor cost of the beams,shafts, 
etc. 

In many kinds of contract work there is a certain amount of 
general work, which cannot be charged directly against any 
one item. This general work is given the Index letter G. There 
is often a certain amount of lost time, due to break-downs of 
plant, delay in receiving materials, etc., which it is well to charge 
against an item called Delays, indexed D. In this particular 
work of concreting on Soldiers' Field no such item is provided 
for, because the work was of such a character and so handled 
that delays were too brief to be worth recording. However, a 
contractor should always require his foreman to keep a record 
of every important delay, and assign a cause for it. This can be 
done very nicely by using index letters; thus, DM would indicate 
a delay waiting for materials; DB would indicate a delay due 
to a break-down of some part of the plant; and so on. If a 
break-down were to delay certain men in their work for an hour, 
then opposite their names would appear 1 DB, and 8 BE, for 
example. 

Regarding the record of the quantity of work done each day, 
there is always a possibility of error. To reduce this error, 
the Aberthaw Construction Co. requires a supplementary report 
every Thursday, showing the total work of the week, and the 
condition of the job. In this way errors of estimated progress 
tend to balance up. 

The foreman does not do the computing necessary to fill 
in the columns in Fig. 109 headed "Am't." This is done by the 
office force. All the foreman is required to do is to record the 
hours worked by each man, the class of work done by each man, 
the amount of cement used in each class of work, and the like. 
The office accountant knows just how many cubic feet or cubic 
yards of concrete are contained in each beam, each base, each 
shaft, etc. ; and can compute the amount of work done by simple 
multiplication. 

To quote from a letter by Leonard C. Wason, president and 
manager, Aberthaw Construction Co.: 

"All the figuring up of pay rolls and summarizing of the 
weekly summaries is done by the office force, which takes two 
men about one day, and the bookkeeper a second day, each 
week, for all the work we have running. We have two comp- 
tometers for mechanical figuring, which saves vastly in the time 



MISCELLANEOUS COST REPORT BLANKS 



351 



and energy of the clerical force. The item of cost of keeping 
these records is so infinitesimal that we have never attempted to 
separate it from the general office expenses." 

The office force makes a weekly summary, compiled from 
the daily report cards. An example of such a summary is shown 
in Fig. 110, which is printed on a white card. This particular 
weekly summary gives the cost, in dollars and cents, of shafts, 
beams, bases, etc. 



job no. 37* 

From -*f*/<L<UrytJ!&t/ S4- , SfrtT- 



WEEKLY SUMMARY 



""U/Sh&^W &e66fo-ee>. 



<f< M- 



fe 



we. 



A 



"Ca 



RF\ 



3A. 



CON 

BE 



CRET 

c 



BA 



PC 



r 



PA 



F<&. 



t£ i*M? 



5 



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m 



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. tLtif.iCM f3>2a 3>kU 3M3 (,%oS 4iM GSo 2Gf/. 2&2f Hit 



3o.>f-).7¥*i0 6t.%f- 



%u 



Amt. Performed 



rfocmed 



Cement Used 



JLyfc %{<? 






A 



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YAWMAH A.B1&E II 



. ROCHESTER AND BOSTON 36«40 lM-2'o6 



Fig. 110. — Weekly summary. 

Figure 109 gives the time and cost of work done September 
20, and it will be noted that the carpenter work on beams (BE) 
cost $6.30 plus $2, or $8.30; this $8.30 is entered in the weekly 
summary, opposite September 20 and in the column headed BE. 
In like manner all other summaries are entered in their respective 
columns, as shown in Fig. 110. The second column of this 
blank, headed "Fore," contains the daily wages paid to the 
foreman. The lower half of the card is devoted to a summary of 
the total number of units of work done and the labor cost per 
unit, exclusive of the carpenter labor, but inclusive of the fore- 
man's wages. For example, the total labor cost of beams (BE) 
for the week was $43.25, and the percentage of the foreman's 



352 CONSTRUCTION COST ^KEEPING AND MANAGEMENT 

wages charged to beams is $4.71, making a total of $47.96, or 
practically $48, exclusive of carpenter's labor. Now, there 
were 20 beams built during the week, so that the labor cost was 
$48 divided by 20, which is $2.40 per beam. It will be seen 
that 45% barrels of cement were used in making these 20 beams, 
or 2.29 barrels per beam. 

We have seen how the daily report card is filled in, and how 
the weekly report is made up in the office from the daily reports. 
We now come to the final report card, or the "master card 
of costs," as shown in Fig. 111. This card is printed on white 
stock, and its face and back are ruled as shown. The proposal 
price, the actual cost, and the profit or loss on each item, as well 
as on the total work, are entered on the face. Then, on the 
back of these cards, are entered the itemized unit costs, as illus- 
trated. 

It will be noted that all the cards are provided with a small 
circular hole in the lower center of the card. This is for filing 
the cards in the standard filing cases. 

Figure 112 is the daily report made by the foreman, showing 
what materials have been received during the day, and what 
materials have been shipped away. On the front face of this 
card, as shown, are entered the quantities of different materials 
received. On the back face of this blank the entries are made 
of materials shipped away. This card is printed on blue stock 
for the regular contract work, and on green stock for extra work. 

Even the ledger accounts are kept on cards, the cards for 
this purpose being Figs. 113 and 114. They are printed on white 
stock, and each card is printed on both front and back faces. 

Figure 115 gives the expense account of each foreman or other 
employee who incurs expenses in behalf of the company. This 
blank is printed on the front face only, and on salmon-colored 
stock. 

Figure 116 is a "pay order" card, and is printed on the front 
face only, on white stock. 

Figure 117 is an "information wanted" card, and a carbon 
copy is kept by the man who fills out this card. This carbon 
copy is printed on thin paper, alternate leaves of the "informa- 
tion wanted" pad being printed on thin paper, so that a piece 
of carbon paper can be slipped between the thin paper and the 
card paper, thus giving a duplicate of all pencil writing. During 
the busy season the office force is out at different times, and the 



MISCELLANEOUS COST REPORT BLANKS 



353 



%)«&, >fe~W^ sjao fence, J%&&^o w2ed£. 




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Front of master card. 







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Fig. 111. — Back of master card. 



23 



354 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Job No. 
Date 


MATERIALS RECEIVED- aberthaw conrtructjqn CO., boston. 
190 Foreman 


SIZE OR BRAND 

fcbls. 


FROM WHOM RECEIVED 

Cement 


8IZE OR BRAND FROM WHOM RECEIVED 

bbls. Glass 


bags 


bars Steel 


Ids. 


Gravel 


ti it 


" Sand 


„ 


" Screenings 


" 


lbs. 


Cr. Stone 


lbs. Lampblack 


;. 


Oakum 


Ids. 


N. Sand 


" Nails 


" Ipswich Sand 




ft. 


Lumber 
















T 




MUvC 



Fig. 112. — Daily material report. 



_ — ' ' 1 










































































































- 


















































































































































































, 
































































































































































, 


1 


k 






























( 




9 






















FORWARD 










1 




FORWARD 















Fig. 113,— Front of loose leaf ledger card. 









MISCELLANEOUS COST REPORT BLANKS 


355 




























































































































































































































































































































































# 














































i> 1 



Fig. 114. — Back of loose leaf ledger card. 



ABERTHAW CONSTRUCTION CO., BOSTON. 

EXPENSE ACCOUNT WEEK ENDING 


Name 


Name 


Day 


Item 


Amt. 


Job 


Day 


Item 


Amt. 


Job 








































































































































































1 


| 








Approved 









Fig. 115. — Expense account report. 



356 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Pay Order 



ABERTHAW CONSTRUCTION CO. 
7 Exchange Place, Boston, Room 5a 



Scratch ( Original 
ou,on< 7 Duplicate 



Date 



Is entitled to 



dollars ($ 



gg) 



in full payment for wages and expenses as per statement below. 



Foreman, 



Date 



Rate 



Job No. 



Time 



Expenses 



Foreman will give every man discharged an order 
_Mall duplicate to office immediately. 



which will be cashed after Friday noon. 



. .....V ........ » ,....«. 



Fig. 116. — Pay order. 



INFORMATION WANTED. ABERTHAW CONST. CO., BOSTON 

Note Reply to the following inquiry on this card at the earliest possible moment and return to 
the writer. The writer will keep a carhon copy. ; 



Date 



Mr. 



Re 



Signed 



Date 



Answer 



LIBRARY BUREAU A489«0 



Signed 



Fig. 117. — Information wanted. 



MISCELLANEOUS COST REPORT BLANKS 



357 



Pattern No. 
Article 

Remarks 



Order No. 



Cast Stone ABERTHAW CONSTRUCTION CO., BOSTON. 

Date Volume Cu. Ft. 



Fig. 118. — Cast stone record. 




Oear Sirs :- Please quote hereon your lowest price f. o. b. . 



for the goods mentioned below and return this card to us and oblige, 
Yours truly 

ABERTHAW CONSTRUCTION CO 
Per__ 



Quantity 



Quotation 



Article 



List 



•f 



Sign here 



Fig. 119. — Price quotation. 



358 CONSTRUCTION COST KEEPING AND MANAGEMENT 

men may not meet one another for several days. These "in- 
formation wanted" cards are then very useful. The carbon 
copy saves the need of remembering the question asked, and is 
used as a follow up if the reply is slow in coming. 

We may note, in passing, that the use of carbon copies is 
becoming much more common than it once was. It not only 
saves the labor of copying a record, but in case of the loss of 
a record in the mails, or otherwise, the carbon copy is available. 
In many instances it is wise to keep all records in triplicate. 
This is easily done by having two thin sheets to each thick sheet, 
two pieces of carbon paper being used when filling in the blank. 



PRICE LIST 
Article 


Date 


Firm's Name 




Price 


Terms 


Remarks 


























































































# 












^r 












-JLIBRARY BUBSAil. J743Z 






■ 



Fig. 120. — Record of prices quoted. 



Figure 118 is an example of a triplicate record blank. One 
copy is kept at the shop, and the other two at the office. One of 
the office records is filed by serial number, and the other is filed 
by the subject of which the cost has been itemized. 

When it is desired to secure a quotation on materials, machines 
or products of any kind, Fig. 119 is used. A carbon copy of this 
card is kept so that a firm which is slow in replying can be 
promptly followed up. This card is printed on blue stock, 
one side only. 

Figure 120 is used for recording quotations on the same article 
as given by different firms. It is printed on salmon-colored 
stock, one side only. 



MISCELLANEOUS COST REPORT BLANKS 359 

A record is kept of every telephone message and every call 
message; separate sheets 4 by 5}^ in. being used to record 
each message, giving time of day, name, telephone number, 
and message. 

To many contractors of the old school, who have trained them- 
selves to carry most of their business knowledge under their hats, 
it may seem that any system of recording facts and figures on 
cards or blanks is largely a waste of time. With this opinion 
we cannot agree. The very marked success of such firms as the 
Aberthaw Construction Co. is ascribed by their own officials as 
being due largely to the completeness of their cost keeping sys- 
tem. Leonard C. Watson, M. Am. Soc. C. E., the president 
of the Aberthaw Construction Co., has given us several 
specific examples of "leaks" discovered by virtue of his 
daily report records. Then, too, every employee feels that 
with such a system of daily reports, his output is bound to come 
under the eyes of the head of the firm. Each employee feels, 
consequently, that not only will laziness and inefficiency be dis- 
covered, but that merit will also be recognized and ultimately 
rewarded. 

Cost Keeping on Rock Drill Work. — We give below some 
sample charts from Engineering-Contracting, Oct. 23, 1907, to 
be used in connection with the record cards to be found elsewhere 
in this book. 

The charts show the location of the drill holes and the key 
letter that identifies the man who drilled them, as well as the 
depth of the hole in feet. 

Two kinds of charts are shown, each adapted for a different 
class of work. Figure 121 shows a chart for use on railroads, 
canals and other engineering work that is laid out with a center 
line as a base for measurements. The ruling is the same as that 
for ordinary cross-section paper, used by engineers, each square 
representing a measurement of 2 ft. each way. Any one wishing 
to adopt this form can have it printed or can buy cross-section 
paper and make his own forms. 

A work of explanation will show how this chart is used in 
connection with the form for recording explosives shown in 
Fig. 122. The work is being done on a new grade of a railroad 
in a cut that runs from Station 92 to Station 98, GOO ft. long. A 
stripping of 3 or 4 ft. of earth has been taken from the top of the 
cut by scrapers, leaving exposed a ledge of rock 12 to 15 ft. 



360 CONSTRUCTION COST KEEPING AND MANAGEMENT 

deep to sub-grade, shown in cross section taken at Station 95 + 
50 in Fig. 123. 

The two short vertical lines in Fig. 123 running through the 
ground surface show the position of slope stakes set by the 
engineer. On these stakes are marked the cutting and the station 
number. Some engineers also mark on the stake the distance 
out from the center. If this is not done the contractor should 
have some one do so. With this distance known it will always 



HO 



5fa35- 



±90 



+■80 



+70 



+60 



+50 



+40 



±30 



no 



HO 



SfcK: 



m- 



L +m 



:i~$v 






Wk 



i&m 



W9k 



+H- 



^B o uti er 



>vm 



-\-fteconJer 



Fig. 121. — Chart for recording location of drill holes. 

be possible to locate the center line, by measuring out from 
several slope stakes. For this purpose, as well as for other uses, 
very foreman should be provided with a metallic tape line. 
One of the authors has also provided his foreman with a half- 
dozen steel pins like those used by land surveyors. These pins 
can be made by any blacksmith, and should be about 10 in. long. 
Through the ring at the top a piece of red flannel should be tied 
so they can be easily seen and thus save them from being lost. 
The pins are not only useful in marking places on the ground, 



MISCELLANEOUS COST REPORT BLANKS 



361 



but a foreman, by their aid, can make any measurement he 
desires, without assistance. He can stick a pin through the ring 
on his tape and make measurements without taking a man from 
his work to help him. 



RECORD ofEXPLOSIVES used GnAS** 
f r hwSta.N0. 9A±30fo5/tr./Va 9A+50. //rCvfiAfa-95. 




Ft 


Sptinqjffg 


Blast/ny 


Cu.Yc/s 

Moved 


Dyna- 
mite 
Lbs. 


Rwder 
Lbs. 


Judson 
Lbs. 


caps 

or 
Fuses 


Fo5e 
FA 


Dyna- 
mite, 
Lbs. 


Powder Judsen Cap 3 " 
Lbs Lbs. Fuses 


fuse 
FA. 


A-l 


4 


1 






/ 


S 


Q 






1 


S 




A-Z 


£ 












4 






1 


3 




A-3 


5 


3 






2 


10 


IZ 






/ 


6 




A-A- 


11 


7 


25 




4 


30 


i 




137 i 


1-/4 




\?A6 


A-5 


IS 


25 






#4 


21 


1 




I6Z± 


1-/4 






A-6 


3 












34 






/ 


3 


B4 




























1 


\Total5 [34 


15 




/-% 


67 


Z9k 




30(? 


2-/4- 




Z49\ 


Cerrect 

F0re*??0/7 



Fig. 122. — Record of explosives. 



In this way he can make his measurements on the ground to 
locate drill holes, and put them on the chart as shown in Fig. 121. 
In this case a driller, whose key letter is A, has been assigned to 
work in the cut in question. He starts by drilling a 4-ft. hole 4 



_ghG0g? 




/ Eng.-Ccr?hr' . * 



Fig. 123. 



ft. to the left of the center line at Station 94 + 30. Then he 
drills a 2-ft. hole 10 ft on the right at + 31, following this with 
a 5-ft. hole 10 ft. on the left at the same station. These holes 
are drilled to "breast up" the cut at Station 94 -f- 32, and while 
these holes are being loaded and shot, and the muckers are 



362 CONSTRUCTION COST KEEPING AND MANAGEMENT 

cleaning up the blasted material, two holes; are being drilled for 
a large blast: Hole No. 4 at 10 ft. on the left, 12 ft. deep; and 
hole No. 5, 10 ft. on the right, 15 ft. deep, at Station 94 + 44. 
After this blast is made a boulder is thrown in the way of the 
workers and the drill is set up to put a 3-ft. hole in it for blocking. 
This is hole No. 6, and notation is made on the chart to show that 
it was drilled in a boulder. This record can be made up by the 
foreman or timekeeper, from the pegs left in the holes by the 
driller, these pegs having burnt on them the driller's letter. 

The blank filled out in Fig. 122 shows how these holes were 
shot, and gives a record of the explosives used. Hole No. 1 
was sprung once with 2 sticks (1 lb.) of dynamite, and then shot 
with 8 lb. Hole No. 2 was not sprung but shot with 4 lb. of 
dynamite. Hole No. 3 was first sprung with 1 lb. of dynamite, 
and again sprung with 2 lb., being shot with 12 lb. All of these 
holes were exploded with cap and fuse, as the record shows. 

Hole A-4l was sprung 4 times, first spring being with 1 lb. of 
dynamite, second with 2 lb, and the third spring with 4 lb. The 
fourth spring was made with one keg (25 lb.) of black powder. 
Powder was used to develop a seam that was opened up at the 
bottom of hole by the other springs. The springing of No. 5 was 
done with dynamite, four springs being made with respectively 
1, 2, 6 and 14 lb. The last spring was shot with an electrical 
is exploder or fuse. The small amount of fuse used in springing 
caused by the fact that for the first springs only a piece of fuse 3 or 
4 ft. long was used tied to a stick of dynamite, and after being lit 
it was dropped into the hole. This can be done when the hole 
is not ragged. These two holes were shot with Judson powder, 
the blasts being put off simultaneously with a battery. It will 
be noticed that the fuses used are recorded both as to number used 
and as to length. 

Hole No. 6 in the boulder was shot with dynamite with a 
cap and fuse. The column for the yardage moved can be filled 
in by the superintendent or some one able to calculate the ap- 
proximate quantity of rock loosened. No yardage is recorded 
with the first three blasts, as these blasts are chargeable against 
the yardage moved by the last heavy blast made in the cut. 

A separate sheet which need not have the springing columns 
on, can be used for blasting boulders, and in a column for remarks 
can be noted the method used in breaking them up, such as 
"block-holing," "mud-capping" and other methods. 



MISCELLANEOUS COST REPORT BLANKS 



363 



The blasts here recorded are not given as economical ones, 
but rather as examples of actual blasts, in which there is nearly 
always used more explosive than necessary to loosen the rock. 
Contractors prefer to shoot rock in this way, as it is extremely 
expensive to loosen and break up rock after an unsuccessful blast. 



m- 



Date. /22. 



l_ ■ 


<b A> 


^ 5> 


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o pn /in fin pn tfYx 


uf ^ uu *HJ Ou Of/ ■■-!-■ by 



Fig. 124.- — Chart of drill holes in a quarry. 



The records shown on the chart and explosive sheet, should 
be copied upon permanent records in the contractor's office. 
The office chart, for showing location of the holes drilled, should 
be a long sheet of cross section paper, showing, on the same 
scale as the small chart, the entire line, except the embankments. 
The totals from the explosive sheet, should be recorded in a 



364 CONSTRUCTION COST KEEPING AND MANAGEMENT 

book made up for that purpose, which should also have columns 
for the drilling records, the work done by the muckers, and the 
transporting of the excavated material. 

Figure 124 shows a chart to be used in a quarry. A base line 
can be run on each side of the excavation to be made in the 
quarry, and from these base lines any point in the quarry can 
be located, for recording on the chart. These records can be 
transferred to an office chart that can be on a larger scale, if 
desired. 

From that chart shown here, it will be seen that four drills 
are working in the quarry. Drills A and B on top of the ledge 
of rock, and C and D down on the breast. C is a small drill 
putting down shallow holes, while D is a large drill snaking in 
holes on the breast as indicated by the long lines drawn from 
the face inward. 

A sheet similar to the one illustrated in Fig. 122 can be used 
in a quarry to record the explosives used. An accurate esti- 
mate of the yardage may be difficult to obtain at times; but it is 
usually possible to approximate the yardage very closely by 
calculating the cross-section along each line of drill holes and 
the distance between the lines of holes. 

In some tough rocks it is frequently necessary to drill a 
foot or two below grade, in order to be sure to break all the 
rock to grade. In such cases, due allowance should be made 
when estimating the yardage of "pay rock" broken. In other 
cases, the rock breaks one or more feet beyond the outer line 
of drill holes, and allowance for this should be made also. But, 
in any given kind of rock, the foreman or timekeeper will soon 
learn how much to allow for these factors, and can then estimate 
the yardage of "pay rock" accurately from the chart of drill 
holes. In this manner it is possible to make a very close report 
of the yardage of rock broken every day, without the necessity 
of cross-sectioning with an engineer's level. The rock-drill does 
the cross-sectioning. 

Forms for Recording Well-drilling Costs. 1 — These forms 
are gotten up by the Cyclone Drill Co., of Orrville, Ohio, and 
are furnished to their customers for keeping records of drilling 
done by machines bought of them. The first blank illustrated 
in Fig. 125 is meant to record a day's work of well drilling or 
deep holes for blasting. From it the cost of drilling per foot 

1 Engineering-Contracting, Nov, 20, 1907. 



MISCELLANEOUS COST REPORT BLANKS 



365 



■REPORT OF CYCLONE DRILL. 



No.. 
For. 



■ Shift 

190.... 

Number of feet drilled 

Number of hours worked 

Driller hrs.... 

Helper hrs — 

From to feet 



Paid for coal Paid for oil. 

Paid to move 



Fig. 125. — Report of well driller. 



DAILY DRILLING REPORT. 
























EXPENSE RECORD. 






TIME RECORD. 




Amount 




Name 


Began Work 


Quit. 












X 


c 

S 




X 


c 
























Driller, 
Helper, 
Helper, 
Machine, 








,M 


.... 




..M 

M 
'M 


i 












"M 












M 


SUPPLIES NEEDED.— HOW TO BE 
SHIPPED.— WHERE. 


Class.... No . 






..M 






..M 


DRILLING RECORD. 






Feet 


Inches. 




Depth las 


















"' 


RECORD OF DRILL HOLE. 










RECORDS. OF DELAYS OR DIFFICULTIES. 


Kind of Strata Drilled 
Today. 


Thickness 


Depth 


Ft. 


In. 


Ft. 


In. 








































MATERIAL RECORD. 






















Kinds of Core Barrel 
Used. 


Length of Cutting Element, 
whether Barrel or Bit. 


To the Treasurer: I vouch for the 
truth of this report. 




Time Used 


Before 


After. 


W 


c 

a 


£ 


a 


£ 


c 


P. 0. Address. 








































































Anytl 


ling used in 











Fig. 126. — Report of prospect drilling (Calyx core drill). 



366 CONSTRUCTION COST KEEPING AND MANAGEMENT 

can be calculated, showing in detail the labor cost, coal and 
oil and cost of moving. 

The form shown in Fig. 126 is meant to be used for pros- 
pecting drilling, especially where a core is taken for record. 
The form is printed on the two sides of the sheet. It gives a 
time record, depth drilled, record of delays, materials and bits 
used, expense account for the day and a record of the drill 
holes showing cores taken and the depth and thickness of the 
strata drilled. 

A Report Card System for Dredging Work. 1 — In the June 
13, 1907, issue of Engineering News, in an article descriptive 
of the Bush Terminal R. R. Co.'s dredge "Independent," men- 
tion was made of a report card system in use on that dredge and 
possessing features of some novelty. The system was devised 
by William H. Arnold, M. Am. Soc. C. E., who was prior 
to June 1, Chief Engineer of that company. J. A. Warner, 
General Superintendent of the company, furnished samples and 
data from which the following description was prepared. 

The complete report cards are made up in there sections, per- 
forations allowing the sections to be detached for use. Figures 
127 and 128 show both sides of a complete card. All of the 
information required concerning the loading of a scow is printed 
on the card, and such information as applies to the loading of 
any one scow is indicated by a punch mark opposite such 
information. 

Figure 129 shows the portion of the card on which the punch 
records are made, as filled out. On this portion of the card, 
the serial number indicates the consecutive number of scows 
loaded; for example, the serial number 250, shown in Fig. 129, 
indicates that the scow covered by that report is the 250th scow 
loaded since the dredge began operation. 

Provision is made to show the date, hour and minute at 
which the loading of the scow was begun and completed. The 
weather conditions, the kind of material handled, the location 
where the dredge worked, and any delays that may have 
occurred, are also provided for. 

The amount of material loaded in the scow is indicated by 
a percentage system. In the sample card which has been filled 
out — see Fig. 129 — the loading was 60% sand, 35% crib and 
5% rock. The percentage, of course, is based on the carrying 

1 Engineering News, Aug. 22, 1907. 



MISCELLANEOUS COST REPORT BLANKS 



367 



capacity of the scow, which in the case of the Bush Terminal 
R. R. Co. is 800 cu. yd.: hence, as indicated, 60% of the 800 
cu. yd. was sand. 


























: '- M£f ■ 


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On the back of this portion of the card is a diagram represent- 
ing the six pockets of the scow; this diagram is shown in Fig. 128. 
When this portion of the card is filled out, notations are made in 
each of the six spaces in this diagram, showing how many of the 



368 CONSTRUCTION COST KEEPING AND MANAGEMENT 



pockets are full and how many partly full. Where the pockets 
are not filled, the shortage is indicated by the number of feet 
and tenths of feet that each pocket is short-filled; i.e., if five of the 



SPA "0 °N isioj. 



UISH TERMINAL CO., 

CHIEF ENGINEER'S OFFtCe, 

Foot 43rd Street, 

B ROOKLYN , ' M. 



Fia. 128. — Back of dredge tug report. 

pockets were full and the sixth 0.5-ft. short-filled, the spaces 
representing the full pockets would contain the word "Full," 
and in the short-filled pocket would be made simply the notation 



MISCELLANEOUS COST REPORT BLANKS 



369 



"0.5." In the case of an 800-cu. ft. scow, then, that would 
indicate that pocket No. 6 was filled to within 6 in. of the top of 
the coaming, and the total yardage for that scow would be 
792.5. 

The other two portions of the card, as shown in Fig. 127, 
are filled out by the captain of the tug which tows the scows 
to sea. They are given the same serial number as that given to 
the report of scows loaded. The addressed section is mailed 
to the Bush Terminal Co. and the unaddressed section sent to 
the owners of the tug towing the scow, for their information in 
rendering bills for towage. 



13 3 4 6 



7 8 9 10 11 12 13 14 IB IB # 18 Id -20 21 22 23 24 25 26 27 28 29 30 31 



MONTH 



Clear 



Fog 

Snow 



BUSH TERMINAL CO. 

CHIEF ENGINEER'S OFFICE 

Foot 43rd Street Brooklyn, N. 

DREDGE INDEPENDENT 



2Sb 



y 



THIS REPORT TO BE SENT TO OFFICE AT CLOSE OF EACH DAY'S WORK 



LOCATION (Where Dredge is Working) 

C^ «?L J„ f.Wc-P. 






3S| <♦ 

R*k 






LOST TIME, CAUSE OF DELAY:- 



fk_4<AM*v*Jt*^(£iWu^^_4^ 



.Lk^&dUL 



Jan. 
Feb. 
Mar. 
April 
May 

>• 

July 
Aug. 
•Sept. 
Oct 
Nov. 
Dec. 



It 



.1&9 

Capta 



>* 
1908 
1909 
1910 



SCOW 



1 2 3 i 5 6 7 8 9 10 11 12 13 14 15 16 # 18 19 20 21 22 23 24 25 26 27 28 29 30 31 



Fig. 129. — Dredge report (punch card). 



The serial number of each scow is shown on the towing com- 
pany's bill, thus enabling the towing company and the Bush 
Terminal Co. to agree without dispute upon the amount of any 
towing bill. 

A System for Recording Costs of Dredging and Dredge 
Maintenance. 1 — The following, by Magee Fisher, is an article 
with blank forms describing a system which will appeal to many 
for its simplicity. It will be noted that this is more of a book- 
keeping than a cost-keeping system proper. 

Accounts divide themselves into two classes: First, accounts 
of original entry, such as "time books" and "purchase books," 

1 Engineering-Contracting, Aug. 14, 1907. 
24 



370 CONSTRUCTION COST KEEPING AND MANAGEMENT 

in which employes' time and purchases of various sorts are 
entered when made; and, secondly, accounts of final entry, to 
which are copied the items previously recorded in the books of 
original entry; the accounts of final entry are known as the 
"ledger." If the accounts of original entry can be so arranged 
that only footings have to be copied to the "ledger" an immense 



No purchases to be entered on this page except those chargeable to 
Cost and Maintenance of Dredge. 
Purchases entered by John Smith, 


Date Items 
1905 | lcems 


Check 
Nos. 


By 
Check. 


In 
Curr'cy. 


On 
Acc't. 


Ledger 
Transfs. 


- 

Oct. 16 
17 
." 

20 
21 


American Steel' & Wire Co., cable. . 


201 
203 


S31.00 
70.17 


$20.00 

2.60 




$30.00 


From materials charged to Stock Acct. 




Total 






1101.17 


$22.50 




$30.00 





No purchases; to be entered on this page except those chargeable to 
Operation of Dredge. 
Purchases entered by John Smith. 


Date 
1S05 


Items. 


Check 
Nos. 


By 

Check. 


In 
Curr'cy. 


On 
Acc't. 


Ledger 
Transfs. 




Standard Oil Co., 5 gallons cylinder oil 






$3.80 

3.88 

.78 

2.00 


$78.40 




Oct. 16 
18 
18 
20 
21 




Smith & Sons, carload coal. No. 13347 




Total.... 








$10.46 


$78.40 







Fig. 130. — Purchase book sheets. 

amount of work and inaccuracy is thereby avoided. Such an 
arrangement is doubly profitable, for it obliges the accountant to 
decide beforehand just what accounts he will and will not keep; 
then, having decided, it is a very simple matter to make all the 
original entries chargeable to any given account on a page by 
themselves; then at the end of the week only the sum total of 



MISCELLANEOUS COST REPORT BLANKS 371 

the page need be copied to the ledger; and, if the loose-leaf 
system is used, all pages of original entry chargeable to that 
account, from the time book and purchase books, can be gathered 
together. But loose-leaf books have been a constant source of 
bother, the pages either tear out or some special kind of punch- 
ing and paper have to be purchased. Fortunately, however, 
there have recently appeared for sale substantial clutch binders 
capable of holding unpunched paper of any kind and in such 
shape that the whole outfit may be handled as conveniently as 
a bound book. 

Accounting is not an easy subject to write about intelligently, 
but the writer thinks that if any one interested will study the 
sample pages of accounts shown herewith he will be able to 
acquire the salient points. The illustration taken is the cost 
account of a dredging operation which the contractor not only 
wished to keep separate from his other operations going on at 
the same time, but to sub-divide so as to ascertain separately 
the cost of setting up, of operating and of maintaining the plant. 

For this purpose he decided on two accounts as sufficient, 
one entitled "operation" and one "cost and maintenance." 

First, in the "purchase book," Fig. 130, were entered all 
the purchases, which, for the benefit of the bookkeeper, were 
classified into "check," currency," "account" and "ledger 
transfer" purchases. Secondly, in the "time book," Fig. 131, 
were recorded the time of the employes, the state of the weather, 
the actual time operating, the progress of the work and other 
items of import. Then each week the sum totals were carried 
to the two ledger accounts, Figs. 132 and 133, where all functions 
of the work could be analyzed week by week. Observe the sepa- 
rate columns for each function — one for coal burnt, one for 
shifts worked, one for man-hours, one for cubic yards moved, 
one for labor cost and one for material cost. 

The contractor's confidential bookkeeper also week by week 
posted off from the "time" and "purchase" books all cash items 
to his cash book and all "accounts" and "ledger transfers" to 
their proper places in the "ledger," thus completing a balanced 
or so-called "double entry" ledger. 

Then when the work of dredging was finally finished the 
contractor abstracted the cost for future reference, Fig. 134, thus 
completing his record. 

Many engineers might find it convenient to keep similar 



372 CONSTRUCTION COST KEEPING AND MANAGEMENT 









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MISCELLANEOUS COST REPORT BLANKS 



373 



cost abstracts of work valuable to them in a small card index, 
which would hold such records for a lifetime and yet never 



Ledger for Page 2. 
Cost of Maintenance of Dredge. 
This account opened at commencement of Building of Dredge, June 15,il905. 


Date 
1905. 


Items. 




g! 

as 


£ 

C 3 
o 


Debits. 


Credits 


Cost 
Labor. 


Cost 

Supplies. 


Oct. 21 
21 
21 
21 








1,951 
100 


(436.22 
17.50 


$913.57 

101.17 
22.60 
30.00 














Footing- 






30 


2,051 


$463.72 


$1,067.24 





Fig. 132.— Ledger sheet. 



Ledger for Page 3. 
Operation of Dredge. 
This account opened at commencement of operation, July 15, 1905. 


Date 
1905. 


Items. 


■a 

i/> o 

CO 

(S-3 


•o 

.2.3 


E? 

C 3 

rt o 
Sffi 


•s . 

US 


Debits. 


Cost. 
Labor. 


Cost 
Supplies . 


Oct. 21 
21 
21 
21 




58 
32 


144 
12 


10,085 

646 


13,781 
1,200 


$2,215.36 
145.53 


$1,209.15 

10.46 
78.40 








Cars of cfeal No. 13347 — No. 768 








9,0 


156 


10,731 


14,981 


$2,360.89 


$1,298.01 







Fig. 133. — Ledger sheet. 



Earthwork — Dredge Operation. 



(Abstract of Cost.) 



1905. 



Location — Mississippi Valley. 

Nature and extent — Railway embankment- 2,000 feet long and 12 feet high; ' borrow pit along $ide 

and parallel with same. 
Material — Sand and silt of Yankee River Delta. 



Total yards moved 

Shifts worked (ten-hour) . 

Cu. yards per shift .". 

Total cost. 



. 14,981 
156 

S 9 

$5179.86 



Cost per yard — total. 34 . 6c. 

do. — operation wages '. 15.8 

do. — operation coal 1.7 

do. —operation repairs 7 ; 

do. — cost of plant wages 8.0 

do. — cost of plant mateiial ; 7:1 

Pounds of coal bumed ■ 180 ,000 

Pounds per yard moved ; ■ 12 

Average rate of wages per hour 2!c. 



Fig. 134. — Final abstract of cost, dredging. 



be bulky. It seems as though printed matter and other records 
accumulate so fast that the average individual is completely 
"swamped" and gains no benefit from his records, whereas, if 



374 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the essential points were abstracted in compact form he could 
have them always at hand. 

As illustrated above, the cost of any given piece of work is 
ascertained by adding together the various items, such as the cost 
of the labor, of the material, of the depreciation on the plant, 
of rent, of traveling expenses, etc. The amount of the work may 
be measured in units such as cubic yards of earth excavated, 
lineal feet of road built, or in per cents of completion, as in the 
case of a house where the architect specifies that it is 40% 
completed. 

If the contractor has spent 50% of the money doing 40% of 
the work, he is apt to have the cold shivers. As frequently 
happens, he does not discover this until the facts have become 
ancient history. 

This is one wrong way of cost keeping. He might better 
have not kept any accounts at all, for what good were they? 

I have taken a house as an illustration, but many of my 
readers can bring to mind some railroad or other large under- 
taking that has come to grief from the same cause. Too much 
stress cannot be laid on the importance of entering all items of 
expense instanter and of keeping the accounts up to date. 

Another wrong way of cost keeping is to keep too many cost 
accounts, the resulting work being so vast as to be a burden. 
Many persons fail to realize the amount of work involved in 
accounting; and this work is apt to be greatly increased unless the 
books are carefully checked and balanced at frequent intervals. 

Estimating is almost the reverse of cost keeping. The work 
to be estimated is measured up into suitable units and tabulated. 
This is called "taking off." The estimated cost of each unit is 
then applied and the amount in dollars set out in the cost column. 
This is called "extending." This, then, is the engineer's esti- 
mated cost of the work to which the business department adds 
various amounts for overhead cost, profit, insurance against 
accidents, interest, etc. Many business men are said to add a 
liberal per cent for underestimating on the part of their engineer. 
Experience in paying the bills of underestimated work is a sure 
but costly road to accuracy in estimating. 

Cost-keeping Blanks for Dredging. 1 — The port of Portland, 
Ore., has two hydraulic dredges at work deepening and widening 
the channel of the Columbia and Lower Willamette rivers. 

1 Engineering-Contracting, May 26, 1909. 



MISCELLANEOUS COST REPORT BLANKS 



375 



One of these dredges has a capacity of 8,000 cu. yd. per day in 
sand, and the other has a daily capacity of 20,000 cu. yd. 







THE PORT OF PORTLAND 

LEVERMAN'S LOG 


Dredge— 

Shift No. / N<>- ? 


Locatkn 

TV*..? 









Time 


Gige 


Belli 


Depth 


Width 


Depth 


Time and ClUK Each Delay 


Other VeueU Pitted 



































































































































































































































































































































































































































Fig. 135. — Leverman's daily report, dredging. 

The dredges work under the direction of the chief engineer 
of the Port, J. B. C. Lockwood, M. Am. Soc. C. E., and he uses 



376 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the following forms in keeping a record of the work done and in 
obtaining the costs. 

In Fig. 135 is shown the blank for the leverman's report. 



THE PORT OF PORTLAND 



Dredge. 



Shift No. I. 



ENGINE ROOM LOG 

Date. 
Location 



Total nmning time 



No. 2_ 



No.3. 



Revolution counter No 



Slowed boilers at 



Fuel received. Scow No. 



Quantity on scovr 



Time and cause of delays in engine i 



CHIEF ENGINEER 



Fig. 136. — Engineer's daily report, dredge. 

On this report the measurements are given from which the 
yardage dredged can be calculated. Also a record is kept of 
passing vessels and all delays to the dredge. 



MISCELLANEOUS COST REPORT BLANKS 



377 



In Fig. 136 is shown the report of the chief engineer of the 
dredge. From this report the delays are taken so that it can 
be a check on the leverman's report. As to causes for delay, 



THE PORT OF PORTLAND 



CAPTAIN'S DAILY REPORT 













At " 










-JQO 




Character of material 










Length of pipe line 


Height of discharge 


Pontoon pipe in use. No. 


Shore • No. " 


Moved ahead 


Feet 


Total for month 


Feet 





Depth dredged belo 



Average rtidth of cut 



Tola! for Month 



Lost time " " " 


Revolution counter " " " 


Fuel received. Scow 


No. 









" quantity 




Qu 


lily 




Rubber sleeves failed. 


No.'s 








" " installed. 


No.'s 








Hauled for vessels 


No. 






Total for Month 


Other vessels passed 


No. 






« .. « 









Fig. 137. — Captain's daily report, dredging. 

the leverman shows the reason for all causes other than those 
occurring in the engine room, the causes for the latter delays 
being given on the engineer's report. This report also shows 



378 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the amount of fuel used. The dredge for this work burn saw- 
dust and shavings, the quantity being measured and estimated in 
cubic feet. 



THE PORT OF PORTLAND No. 



ENGINEER'S MONTHLY REPORT 



At- 



Tor- 



Inclusive- 



J90- 



Character of material 



Length of pipe line 



Height of diicharge 



Shore pipe in use. No 



Feet. Average per day 



Depth dredged below ; 



Average width of cut 



Average depth of t 



Yards excavated 



Average per day 



Revolution counter 



Fuel received. Scow No 



Fuel, quantity 



Rubber sleeves failed. No's 



Hauled for vessels. No. 



Average per day 



Other vessels passed- No 



- Cow -per cubic yard 



Chief Engines* 



Fig. 138. — Engineer's monthly report, dredging. 



In Fig. 137 is shown the blank used for the captain's report. 
The other reports are meant to show some details for each shift, 
there being three shifts of 8 hr* each, while in this report all the 



MISCELLANEOUS COST REPORT BLANKS 379 

work is grouped for the 24 hr. This report is evidently made 
from the two previous blanks and also from data collected by 
the captain, or under his direction. 

In Fig. 138 is shown the cost analysis sheet, gotten up each 
month by the chief engineer of the Port. This form is at once 
a summary and also an analysis showing the cost per day, the 
cost per cubic yard, the average time worked per day, with 
average work done. This report is made up from the daily 
reports of the captain and also from the timekeepers' sheets 
or pay rolls. We regret that we cannot reproduce a copy of these 
forms. In all cases there should be blank forms, showing the 
number of men worked on each shift, their positions and rates 
of wages. 

Special attention is also called to the analysis sheet, as this 
is a weak point in many cost-keeping systems; that is, the lack 
of an analysis sheet. From such a sheet it is possible, at any 
time, to learn of the efficiency of the work being done, and at 
the end of any job the average cost is quickly calculated. This is 
not possible when daily sheets only are kept, without a great 
deal of labor, and when a large number of daily reports have 
accumulated it frequently happens that it is never done. Thus 
the greatest value of cost keeping; namely, showing the efficiency 
of the work done, is not obtained. 

A Cost Record System Used on Flood Protection Works 
at Grand Rapids, Mich. — The following system was described 
by C. S. Keating in a paper read before the Illinois Society of 
Engineers and Surveyors. 

The administrative department of this work consisted of 
a superintendent and the writer. The former had charge of 
the men and of the direction and arrangement of the work. 
The writer had charge of the engineering and business portions. 
He had also the purchasing of all machinery, supplies, materials, 
fuel, etc. ; looked after the various plants, keeping them in repair 
and good running order, and attended to the renting of all 
grounds, machinery, etc., and the direction of the teams. 

The writer arranged and installed a cost account system. 
This included a general distribution sheet for the bookkeeper's 
use, cards for each division of the work (showing the amount 
of work done each day and the labor cost of same), and cards 
for recording minute observations for use in arranging men and 
teams to the best advantage. The writer kept the time per 



380 CONSTRUCTION, COST KEEPING AND MANAGEMENT 



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MISCELLANEOUS COST REPORT BLANKS 381 

sonally, so as to keep a more efficient account of the work and 
check up the distribution from the cards each night with the 
time for that day. He found that by keeping the time he be- 
came familiar with the face and dress of each man, and when 
watching the work, could readily tell the position of each man 
and the work he was doing. This was a great help where a 
large number of men were employed. 

The cards used for this work were the ordinary blank filing 
cards, 8 by 5 in., and were ruled and marked by the writer as 
fast as they were needed. 

The general distribution sheets were 38 by 24 in., ready ruled 
horizontally, and ruled vertically in the office to correspond to 
the various headings, as shown in Fig. 139. A tracing was made 
of the heading of the sheet and blue-prints made, which were 
carried by the city engineer and the writer to use for reference 
in writing orders for material, etc. One of these sheets was 
used by the bookkeeper and one by the writer. The bookkeeper's 
sheet was used for all accounts, and the writer's sheet for pay- 
rolls only. At the end of each week, the pay roll was totaled 
and checked with the distribution for that week, tabulated on 
the sheet, a list made out to correspond, and sent to the book- 
keeper with the time book and tabulated on his sheet. Order 
blanks were used when buying materials, etc., and the distribu- 
tion numbers put on each item. These were in duplicate, one 
going to the seller and the other to the office. In this manner 
the bookkeeper had no trouble in keeping his accounts correctly 
distributed. 

Referring to the accompanying sketch of this general sheet 
(Fig. 139) under the heading of superintendence and general, 
was charged the superintendent's salary, carfare, cost of office, 
the lighting, watchman's time and part of the bookkeeper's time. 
To engineering was charged the writer's time and carfare, and 
the time and carfare of the field party giving lines, grades and 
taking cross-sections. The remaining headings are self-explana- 
tory. 

Taking the cards in sequence, to correspond to the general 
sheet, the first is the daily report of coffer-dam construction 
(Fig. 140). This example gives the card as it appeared for 
Feb. 22, 1906. No new sections were built or put in place, five 
sections were filled, making a total length of 80 ft. finished. Men 
filling: 4 at $1.75, 3 at $2; 4 teams at $5 hauling clay, and 3 



382 CONSTRUCTION COST KEEPING AND MANAGEMENT 

men at $1.75 digging clay and loading. In connection with the 
heading "Men Placing" it may be explained that it took a num- 
ber of men to bring the sections to place (which was done by 
the use of ropes), on account of the current in the river and 
the swirl around the end of the section already in place. The 
time for these men, which would be but a few minutes for each 
section, was kept by the foreman making note of the work from 
which each man was taken. In making up the distribution each 



Dai/g Report 0/ Gof/er £)o/n Consfri/ctton 
Month o/_ fe6ruory_ /906. 


Days. 


■Sections 
Pat /rr 


Sections 

_P///ect_ 


length m\ Men 
fiet f/nisAtaSui/d/ni; 


Men 
P/ac'ng 


Men 
fij/ing 


Materto/ 


Men 
C/ppmo 
otau 


Men 
OtgeiK, 
Sonet 


Iteier 


Cfyfo 


tSaxtfy Saps- 


rAur ze?*- 




n 


*.',U ,/,9 


4Z, m , 


























































11 


w->-^J 


■ 


L~- J ■ i 










—~~a 





Fig. 140. — Daily report, coffer dam. 

night, the time for placing was deducted from the work as indi- 
cated by the foreman's report. The bags used on this work were 
old grain sacks and were obtained from the various milling 
companies in the city at a cost averaging about $6.50 per 100. 

The first example given on the "Pumping Record" (Fig. 
141) is actual, the other is merely for illustration. The amounts 
of coal, oil and waste used were obtained by dividing the quantity 
received at that pump by the number of days run to exhaust the 



Dat/y Pecorat 0/ Pttm/}ini/. 
Mont/r of February /306. 


Days 


Attc/ 
Pumps 


mo/ 

Engines. 


ffento/ 
Primps. 


V Pento/ 
Engines. 


N* of 

Engineers 


Totaf 

Wages 


Coa/ 
lbs. 


0;/ 

Oats 


Waste 
Lbs. 


V A/St/rs 
ffun 


Pump/ng /or 


Wait. 


Qt/orryjng 












3 -'/«-' 






















w 


Kes 








<r* 






































, 1 

























Fig. 141. — Daily report, pumping. 



supply. The hand pumps were used for the wall only and the 
steam pumps for the quarry only. 

The daily report of compressor operation (Fig. 142) is self- 
explanatory. The sections of " drills running " and "feet drilled " 
were used on this card for comparison. In the daily drill record 
card (Fig. 143) the operation of five drills necessitated the use 
of two cards to keep the record. The number of bits used for 
each drill, each day, was generally eight, there being four bits in a 



MISCELLANEOUS COST REPORT BLANKS 



383 



set, and usually two sets were dulled in a day's running. The last 
column is to receive the wages paid the drill runner and helper. 



Da//y /Pey?or/ of 'Compressor O/oeraf/o/r. 
Month of February /906. 


Days. 


/lours 
ffu/t. 


S/eom 
/Pressure 


A,r 
fr-essure 


Goa/ 
Lbs. 


/V> ,l/ £>///* 

/funning 


Fee/ 
Dr,//ect 


b// 

Ga/s 


Was/e 
Lbs. 


/?e/>a/r5 
Labor 


faa/aeers 
5a/art/ 







































































































Fig. 142. — Daily report, air compressor. 

The daily report of blasting was kept as shown in Fig. 144. 
The number of cubic feet displaced was measured on the surface, 




Fig. 143. — Daily report, rock drills. 

and multiplied by the depth of the exposed face. The last three 
headings for lost time are for time lost in leaving the quarry 



lOa//y fle/Jorf o/ fi/as/tnp. 
MonrA of February /SOS. 


Doi/3. 


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3/asfs. 


Ibt t/40t /V> o/ 
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jor /.osrd'////?/n6 


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JEO 


3? 
































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1 




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Fig. 144. — Daily report, blasting. 

while blasting, but as most of the blasting was done at quitting 
time, noon and night, there was very little of this to account for. 



Da//y /?e/oorf ofMov//?y J?/o/re. 
fi7o/7//r of February /906. 




Fig. 145. — Daily report, hauling rock. 

The report of moving stone needs no explanation further than 
the headings on the card, Fig. 145. 



384 CONSTRUCTION COST KEEPING AND MANAGEMENT 



The blacksmith's report is shown in Fig. 146. As to the 
drill bits sharpened," when the bits became too dull to do effi- 




Dat/y ffe/oort of 3/ac/t- Jtv/'/A. 
Motrt/r of February /906. 



//* of Or/// B/ts 



/Vor/red. Snaroarea (faat&Get 



Mads IMStee/kLabor 



ffepairs to Griffs. [ I Sarrou/s 
ffepoirei 



Matt 



P/eJbSStr. Goa/ 

•q S/raroe/raV. As (/sed 



Wages. 



Fig. 146. — Daily report, blacksmith. 

cient work, they were heated, driven into a die and tempered. 
As to "upset and cut," after a bit had been sharpened a few 



0a//y ffe/oorf of Grus/rfs?gr. 
Afonf/r of February /SOS. 


Oat/3. 


£ngineer 


Goa/. lis. 


O/f. Ga/s. 


Waste. 16s. 


Afenfeed/ty 


-Crushed 


tost 7ime 


Amount 


ffeason 


&•//. e/ff 


j-Jk*i 




nr„f jus;?/. 


'/, 


0" ,'*» 


40 






n 
















_ 
















<— r 



















Fig. 147. — Daily report, rock crushing. 

times it became so small across the base as to bind in the hole, 
then it had to be upset, the leaves cut in and sharpened. The 
blacksmith made all the new bits needed. 



Dai/y ffeporr af Work on Wa//. 
Month 0/ February /SOS. 


Gays 


Bi/s. 0/ 
Garten/ 


Git Yds. of 
Sand. \ 


Gutas 0/ 
Stone t 


Men 
Mixing 


Men 
P/ac/ng 


Alton 

3u//din?fcm 


Materia/ 
forms 


Materia/ 
P/acing 


A/fGufds. 
in P/aoe. 


/Tea, U&. 


£e.s 


. 9 


£,.* 


e-;* 


,r~3Vj.*m 


r?i* ,-•?'-' 






>»,* 










































L- 








, ' 











Fig. 148. — Daily report, concrete wall. 

On the crusher report, Fig. 147, the number of cubic yards 
crushed was obtained by tallying the number of yards in the 



Minu/e Obserita//ot7s of Dri/Z/ny. 

On// /V*_ ffi/id^ i5/i<9-.__, 

/fanner. p/oerbr //often.. . .. .. -.-//vr/hr 


A/a, 


first Bit. 


iSfcondB/t: 


r/r/rd Bit 


fburtn Sit 


*.z>. 


/Pemar/es. 


Gbsgi 


Own 


/farto 


(Ussye 


Oowr> 


i%>ffl 


dhsffe 


/ban 


fh/rrfl 


Cfonfe 


Gou/n 


fym/x 














































































, 
























































— 



































Fig. 149. — Minute observations, drilling. 

bins, the amount hauled to storage, sold, and that used in the 
wall. 



MISCELLANEOUS COST REPORT BLANKS 



385 



On the report of wall work, Fig. 148, the figures given are 
for illustration and are not actual. The amount of cement used 
was obtained by tallying the bags as they were used and checked 
by counting the empty bags at night. The lumber was measured 
in the forms each night by the writer. The concrete was meas- 
ured in the forms and the work of each day lined out on the 
outside of the forms. 



M/rrufe OAservatfo/rs of Mov/>rg <5to*?e. 

Weatfier. Gurdf/fo/> of /food. . _.^_. 

lenpfa of MauL .. to Merr. t/>er/ir. Team. . . fyerA/: 



G>3f /oar yi/ rn c/3. \7i/at 

laadv rg t fot/fag 'Jrjarftfj fa/urn fos/fa^ &to? 



{.oatf/ng 



Pare |/v'»/|zv,, I»»' 

Jgg_ jfa£_ _ggf_ Mma. 






n 



7Tma 



Vfo/ 



1 



Fig. 150. — Minute observations, hauling rock. 

The "minute observations of drilling and moving stone" 
(Figs. 149 and 150) were made occasionally to get the most 
out of the drills. Also to get the best distribution of men for 
loading and unloading stone, so as to cut the time lost while 
the teams were standing to as small an amount as possible, while 
at the same time working the men to advantage. For example: 
When the number of men loading or unloading brought the 
price per cubic yard above the price of a preceding observation 



Mater/a/ ffece/ved ofrcf dcce/ifed. 
Wee/r End/rtf Wednesday. J906. 


Ort/er 
Afg 


fie/* 


/?e'ce''red from 


0ua/!f/fy 


/fB.1773- 


f>-/ce \/f/iKi//>f 


e/sfri- 

bufio/j/A 












Hlii 


( 














III 


1 




























. J 


■ .i II 1 IX 


4 






Fig. 151. — Material received. 



and the corresponding decrease in lost team time was not suffi- 
cient to balance it, it was evident that there were too many men 
loading or unloading and the force was decreased accordingly. 
The observations of drilling were taken to get the best results 
from the drills and keep the men from loafing when making new 
set-ups or changing bits. 

Under the head of loading on the stone card (Fig. 150), the 
"size" gives the dimensions of the wagon box; the "time" is 
the number of minutes and seconds taken to load, and the "total 

23 



386 CONSTRUCTION COST KEEPING AND MANAGEMENT 

time " is the time multiplied by the number of men. "Hauling" 
is the time taken in going from the point of loading to the point 
of unloading and returning. The sud-headings under "un- 
loading" are the same as for "loading." The number of yards 
in the load is taken from the size of the wagon box, and the cost 
is figured by dividing the total time multiplied by the rate of 
wages, by the number of yards in the load. The total cost will 
be the sum of the costs per yard multiplied by the number of yards. 
The "material received" card (Fig. 151) was used merely 
as an additional check on the orders and to prevent any firm from 
charging up rejected material, and to keep a record of orders 
filled in part. 



N* 

£ouf/it of 


G/fy £>?p//7eers Oft"/G& 


.../SO 












For Worfijf. 




C/ry Engineer 




Par . 



Fig. 152.— Order blank. 

The order blank (Fig. 152) was used in general by the engi- 
neer's office when purchasing materials or supplies. 

The stone slips (Fig. 153) were printed for this work and 
served the double purpose of a sales slip and tally on the time 
the teams were taking in making the deliveries. At the top is 
the kind of stone, the size of the wagon, the weights, and the 
scales used. Along the right-hand end are the hours from 5 
A. M. to 7 P. M., and the minutes (by tens) for each hour. As 
the team was loaded, unloaded and returned the time was marked 
with the letter of indication shown at the bottom, in 
the minute square opposite the proper hour. At the bottom, 
the. month, day and year are indicated by punching. The 
body of the slip is used for the purchaser's name, the place of 
delivery and the driver of the team. The words "ground" 
and "loaded" were used to designate respectively whether the 
stone sold was loaded from stone piled on the storage ground or 
loaded from the quarry. 



MISCELLANEOUS COST REPORT BLANKS 



387 



From these cards and slips, taken together, the unit cost 
of any piece of work or any part of the work can be obtained. 
This is done by assembling the various items included in the 
work, from the card for that work and the items on the cards 
for any other division of work that may be chargeable to that 
work, in whole or in part. 

For example: The cost of the crushed stone used in con- 
structing the wall will be derived from the cost of crushing and 
quarrying. The quarrying in turn will include pumping, com- 
pressor operation, interest, depreciation and maintenance, 



BOARD OF PUBLIC WORKS. 

ENCINEERINC DEPARTMENT. 



.7081 



w -< ~ .-i e* M in 



IS 

o n 



I * 



5]io|2o}3ol4o|50 



6JJ0J20J30I40J50 
"7|]oj2o|3ol4o|5o 
8 |io|2o|3o|4o!50 
9~tm|2o[3o[4^i5"o 
io|io]2oi30|40]5o 
ri}7oi2o'i3oi4o|50 



Sold to ....... » , 

Ground. Loaded. Delivered to 

RECEIPT (0 be signed by Purchaser . 

and returned by Driver to Quarry. .Driver. 

JaJT|Feb^Mar.| Apr.| May| Jun.| Jul.| Aug.|Se p.J Qct!|Nov .!Dec. j I j ^ 1 ' | 

r\T\T\ 4 1 5 I 6" I 7 I 8 I 9 | io|iiji2 "| i3 li 4 |l5|i6 J||i| ||| 
!7|i8|u;i2o|2i I 22 I 23 I 24 1 25)26 I 27 1 28 I 29 I 30 I 31 j |1| j 

Fig. 153. — Stone record and team card. 



i e|io|2o |3p|40i50 
1 !ioj2o|3o|4o|50 
Vj'iol FdJ3oi4o[5"6 
_3 jio i20;30|4o|5 
4|io"|2 o|3ol4o| 5Q 
5jioi£o|3o|4ojso 
6|id | 2oJ3o |40|50 
7 |ioi 2ol3o|40|5 

LOADED L 

DELIVERED D 
RETURNED R 



drilling and moving stone, the blacksmith's work chargeable to 
drilling and tool repairs, the blasting, and the cost of cofferdam. 
The record of the number of men or teams or both, at work 
on any piece of work for each day, gives more concise data 
regarding the working conditions of the work, than would be 
the case if merely the total amount of time for the day were 
recorded. 

By filing these cards, with a table for each showing the amount 
of work accomplished each day, together with the average cost 
per day, covering any convenient length of time or obtained 
after the completion of the work, excellent data would be kept 
for use in making estimates on work of the same character, 
making due allowance for the varying conditions. 



388 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Forms for Breakwater Construction, Including Quarrying, 
Concrete Work and Dredging. 1 — It should be stated that these 
blanks were not used by the contractors, but by the Government 
engineers who wished to secure a record for their own use. Now, 
it is obvious that a Government engineer is not particularly 
concerned about the daily output of each worker or each small 
group of workers, for it is not his province to devise a system 
that will make the men more efficient. In spite of this fact, 
these blanks have some good features that will serve as sugges- 
tions to contractors and to engineers who are doing similar 
work. Those who have written articles on cost keeping have 
usually been engineers, and not contractors. Hence they have 
had a point of view quite different from the point of view of 
the contractor. The engineer wants records of cost, principally 
to furnish assistance in estimating costs of similar work in the 
future. Incidentally, he wants records that can be used in case 
of claims for payment for extra work, and for use in presenting 
testimony in possible lawsuits between the contractor and the 
owner or company whom the engineer represents. The con- 
tractor, on the other hand, should keep cost records principally 
with a view to reducing his costs, and incidentally with a view 
to making safe bids on future work. Therefore, the contractor 
who says it does not pay to employ men to keep costs for him, 
simply exposes his own ignorance of what is the fundamental 
object of costkeeping. 

Let us now consider the blank records used on the work 
of constructing the Buffalo Breakwater. This work involved 
the quarrying of rubble stone and capping stone for the break- 
water; conveying this stone in scows from the Canadian quarry 
to the breakwater; placing the stone; making and placing con- 
crete blocks for a superstructure; drilling and blasting out the 
channel in the harbor; and dredging the blasted material. 

To obtain the cost of this work the Government engineers 
devised a set of daily report blanks, seven in number, which are 
reproduced herewith, two-thirds size. Each blank is 3% times 
8 in., which is a size convenient for filing. 

Figure 154 gives the daily record at the quarry, includ- 
ing the force employed, the plant employed, and the output 
of stone shipped away. While this blank would serve well 
enough for the determination of costs at the end of the month, 

1 Engineering-Contracting, February, 1906. 



MISCELLANEOUS COST REPORT BLANKS 



389 



it is of little use to a contractor, unless the stone that is quarried 
is shipped on the day that it is quarried. If not shipped on 
the same day, the record of daily output of the quarrymen cannot 



Buffalo breakwater construction 

CONTRACT OF HUGHES BROS. & BANGS. 

DAILY REPORT OF OPERATIONS 

CANADIAN QUARRY. 


RUBBLE STONE SHIPPED. 




NO. OR NAME OF VESSEL 


TONS. 


NO. OR NAME OF VESSEL. 


TONS. 


























CAPPING STONE SHIPPED. j 


NO. OR NAM. OP VESSEL 


TONS. 


NO.ORNAMEOFVESSEL. 


TONS. 










FORCE. NO. PLANT. NO. 


Superintendent 

Timekeeper . 




Locomotives ..... 

Large Flat Cars * . 

Small Flat Cars _.. 

Boxes or Skips 

Stationary Boilers 

Skeleton Hoist'g Engines 
Hoist'g Engine with Boiler 
Incline Engine and Boiler 
Large Steam Drills ..... 
Medium Steam Drills ... 
Pony Steam Drills A**. .. 

Steam Pumps 

Derricks 




Drill Helpers 

Hoist Engineers 









Laborers — 




Blacksmiths - . 

Blacksmiths' Helpers 

Carpenters. .• 

Water Boy3 

Teams 











- 




















Remarks : Weatker, Sea, Delays, etc. 

Once a week measure each stone on one scow had of capping stone 
and note same in detail on back of report, 

Inspector. 





Fig. 154. — Daily report, quarry. 

be determined from this blank. The stone was weighed by the 
water displacement of the scows, giving an accurate measurement 
of the total quarry output over any considerable period of time; 



390 CONSTRUCTION COST KEEPING AND MANAGEMENT 



but, if asked, what was the exact output of the quarrymen on 
Tuesday of a certain week, no answer can be obtained from such 
a record. The record is, therefore, incomplete for the purposes 



BUFFALO BREAKWATER CONSTRUCTION 

Contract of Hughes Bros. & Bangs. 

Dally Report of Operations Stone Breakwater 

„ 190. 


DECK AND DUMP SCOWS. 

RUBBLE STONE. 




KIND OP STONB PLACED. 


TONS. 


SEC. 


RANGE. 


BETWEEN STAT.ONS. 


Small Rubble 

Ordinary Rubble .. 


































Totals, 








NUMBER OR NAME OF VESSEL. 














■FORCE. NO. PLANT. NO. 










































GRAVEL. 


NO. OB NAME OF VESSEL. 




SEC. 


l" ANC H. 


BETWEEN STATIONS. 










































































FORCE. NO. 'PLANT. NO. 


































Remarks: Weather, Sea, Delays, etc. 

Inspector. 



Fig. 155. — Daily report, breakwater. 

of a contractor, although satisfactory for the purposes of the 
engineer. 

Figure 156 on the other hand, is much more complete, for it 



MISCELLANEOUS COST REPORT BLANKS 



391 



gives the daily output of the gang working on each derrick. 
Figures 157 and 158 for recording the concrete work; are also sat- 
isfactory. A contractor, however, would need a space for the 
name of the foreman in charge of each separate gang. 



BUFFALO BREAKWATER CONSTRUCTION 

Contract of Hughes Bros. & Bangs. 

Dally Report of Operations Stone Breakwater 

190 


DERRICK No 






CAPPING STONE. 




KIND OF STOKE PLACBD. 


NO. 


SEC. 


KANGB. 


BETWEEN STAT.ONS. 


H. Footing Angle 
H. Revetment . . 
H. Capping .' . . 

L. Footing Course 
L. Revetment . . 
L. Capping . • • 
L. Top Angle . . 
Center Fillers . . 




































































Totals, 










RUBBLE STONE. 


KIND OF STOKE PLACED. 


TONS. 


SEC 


l! A " C h. 


BETWEEN STATIONS. 


Ordinary Rubble . 














Total, 








FORCE. NO. PLANT. NO. 


Foreman 

Hoist Enginemen • . . 
Swing Enginemen . . . 
Asst. Foremen .... 
Stone Pickers .... 

Stone Setters 

Laborers 












1 

s 
















Scow N 












.■ ,„ : 




Rtmarks: Riport invariably the weather, wind and tea. Also 
delay!, tie. 

Inspector. 



Fig. 156. — Daily report, breakwater masonry. 

Note especially that on Fig. 158 there is a column for entering 
the numbers of the stations between which the concrete was 
deposited. The stations were 100 ft. apart, as in railroad 



392 CONSTRUCTION COST KEEPING AND MANAGEMENT 



work. This recording of the exact location of the work done 
each day is usually omitted by the contractor who has not had 
experience also as an engineer. It is a serious omission, for 



BUFFALO BREAKWATER CONSTRUCTION 1 


DAILY REPORT OF OPERATIONS 

CONCRETE SUPERSTRUCTURE 
:. 190. 


MANUFACTURE OF CONCRETE BLOCKS AT 




KIND OF BLOCKS MADE. 


NO. 


MATERIALS USED. 


NO. 


Lake Face 

Harbor Face - . . . . 
Interior Wall 

Cross-Wall Parapet . . . 
Cross-Wall Banquette .. . 
Special 




Cement Bags. 

Gravel C.Yds. 















Totals, 






















■O r FORCE NO. PLANT ' NO. 




















rE: I-:.: 










Remarks : Weather, Sea, Delays, Brand of Cement, etc. 

Inspector. 



Fig. 157. — Daily report, breakwater concrete. 

the progress of all such work should be plotted on a map or 
profile kept in the office, so that the contractor can tell at a glance 
what work has been done each day, and where it has been done. 



MISCELLANEOUS COST REPORT BLANKS 



393 



Coming now to Fig. 160, we find a blank that gives more 
detail than any of its predecessors. We note, for example, 
that each row of drill holes is numbered, and that each hole in 



BUFFALO BREAKWATER CONSTRUCTION 


DAILY REPORT OF OPERATIONS 

CONCRETE SUPERSTRUCTURE 
_ 19C 





PLACING BLOCKS AND BUILDING SUPERSTRUCTURE AT 




KIND OF BLOCKS SET. 


NO. 


SEC. 


BETWEEN STATIONS. 


Lake Face 

Harbor Face 

Interior Wall - 
Cross-Wall Parapet . . 
Cross- Wall Banquette . . 
Special 
































Total, 








MASS CONCRETE PLACED. 


LOCALITY. 


SEC 


CU. YDS. 




Lake Face Wall .... 
Banquette Deck .... 
Rem. Harbor Wall, etc. 

Parapet Deck 

Steps, etc. 




















Totals, 








MATERIALS USED. 


Cement, Bags ... 
Broken Stone, Cu. Yds. 
Gravel, Cu. Yds 




















FORCE NO. PLANT NO. 


































































Ktmarki : Weather, Sea, Delays, Brand of Cement, ete. 

[nipector. 



Fig. 158. — Daily report, breakwater concrete. 

the row also has its number. This, when accompanied by a 
sketch showing the spacing and position of the holes, gives an 
accurate record of the drilling work. The depth of each hole 



394 CONSTRUCTION COST KEEPING AND MANAGEMENT 



is recorded and the number of pounds of dynamite charged in 
each hole. These holes were drilled under water, hence one 
column is reserved for entering the depth to rock. 





EMENT C 














Daily Report of Operations— DREDGING. 















Tug 






NUMBER 

OR NAME OF 

SCOW 


LOADING 


KIND OF 
MATERIAL 








Began 


F.NISHED 




















































































































































TIME ACCOUNT 


CHARACTER OF DELAYS 




Becan 


Stopped 
Won* 


HOUBS 

Worked 


• Delayed 
































































Weather 


WIND 


SEA 


WATER GAQE READINGS 




DIRECTION 


For.ce 


A. M. 


NOON 


P. M. 


Mean 






















FORCE 


NO. 


FORCE 


NO. 




ENGINEMEN 










CRANESMEN 










FIREMEN 




















REMARKS: 
































Inspector, 
1 — _ 





Fig. 159. — Daily report, dredging. 

We are indebted to Emile Low, M. Am. Soc. C. E., for these 
blank reports, which were prepared by him while in charge of 
the Buffalo Breakwater construction. As a result of his experi- 



MISCELLANEOUS COST REPORT BLANKS 



395 



ence with the keeping of records, he suggests that it would be 
wise to make the blanks 7 by 8)^ in. in size, as indicated in Fig. 





NT 








Daily Report of Operations— DRILLING and BLASTING ROCK. 












Tug 


NUMBER 


— 


OfliLUNC Holes Blasting Rock 


DEPTH 

Hole 


m.'eT' 


Post- 


Ro.y 


Hole 


Drill 


Began 


Finished 


Time 


Time 

Worked 


































































































































































































































































































































Weather 


WIND 


SEA 


WATER OAGE READINGS 


Direction 


Force 1 


A. M. 1 Noon 


P. M. 


MEAN 


FORCE' 


NO. 


FORCE 


NO. 


FOREMAN 




FIREMEN 




DRILLERS 




LABORERS 




BLACKSMITH 








" HELPER 
























REMARKS: 
















Inspector. 



Fig. 160. — Daily report, subaqueous drilling. 

160, which is the same as Fig. 154, except for certain changes in 
arrangement and certain additional columns. Figure 161 can 
be folded in the middle so as to form two pages of a note book, 



396 CONSTRUCTION COST KEEPING AND MANAGEMENT 



BUFFALO BREAKWATER CONSTRUCTION, 

CONTRACT OF HUGHES BROS. & BANGS. 

DAILY REPORT OF OPERATIONS. 

CANADIAN QUARRY. 



.190. 



FORCE. 

STATE OPPOSITE 

WHERE EMPLOYED. 



Superintendent. 
Timekeeper. . . . 



Foreman 

Drillers 

Drill Helpers 

Hoist Engineers... 

Firemen... > , 

Laborers 

Engiae Drivers 

Blacksmiths 

Blacksmiths' Helpers 
Machinists.... 

Carpenters 

Water Boys.. 
Watchmen. .. . 
Teams 



to 

3 

a 


■3 

c 

p 

M 

_c 
•3 
a 

_) 


a 
H 


a. 



J3 

in 









Remarks: Weather, Sea, Delays, etc. 

Once a week measure each stone on one scowload of capping stone and note same 
in detail on, back of report. 





RUBBLE STO 


NE SHIPPED. 




NO. OR NAME OF VESSEL. 


TONS. 


NO. OR NAME OF VESSEL. 


TONS. 


















CAPPING STC 


NE SHIPPED. 




■JO. OR NAME OF VESSEL. 


TONS. 


NO. OR NAME OF VESSEL. 


TONS. 


























, 



LoQomotives 

Large Flat Cars 

Small Flat Cars 

Dump Cars 

Coal Cars 

Boxes or Skips 

Stationary Boilers. .... 

Skeleton Hoisting Engines . . 
Hoisting Engine with Boilei 
Incline Engine with Boiler.., 



PLANT. 

Large Steam Drills. . . 
Medium Steam Drills. 
Pony Steam Drills. . . . 

Steam Pumps 

Derricks : . . . . 



Fig. 161. — Daily report, quarry. 



MISCELLANEOUS COST REPORT BLANKS 



397 



each 434 by 7 in. Then the sheets can be made up into a time 
book containing 31 sheets, or one for each day in the month. 
However, if it were desired to send in the sheets each day, as 



MORRIS & PEUGNET. 

DAILY RECORD. Lester, W. Va. t 190 . 


CLASS OF WORK 


LOCATION 


WEATHER 


| | 




RATE 1 amount Itotal a«t 


REMARKS 


$ f Ct9 | $ | Cts| $ 


cts 








FOREMEN 














1 














B'R'T FWD. 

























TOTAL 
























LABOR 








.BRT FORfD 
















| 




















I 




















■I 
















J 






















































































TOTAL 
























MULES 


BRT FOR'O 




* 




1 




















TOTAL 


















————— 
BRT FOR'O 


. 

HIRED TEAMS 












































TOTAL 




















HOWMOVEOg EXCAVATION 








I 


.. !•••• 










TOTAL J 


























Haul in Feet 


EARTH 

Cu. Yds. Lords 


LOOSE ROCK 

Cu. Yds. Loads 


SOLID ROCK 

Cu. Yds Loads Cu. Yds Loads 












1 












































TOTAL I 




















_ „ „ ] 













Fig. 162. — Daily report, railroad grading 



would be the case where a contractor is keeping the records, 
the same sheets could be used and folded in the other direction 
making a folded sheet d ] i by 8}i in. 



398 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Cost Keeping on Railroad Construction. 1 — In railroad con- 
struction it is more difficult to secure proper supervision of work- 
men than on any other kinds of engineering work. This is due 



A, J. NORRIS O CO. *orm 2. 
DAILY RECORD. laynesvllle, Ky., 1903 


EXCAVATION 


Cut | Borrow Pit | Foundation | Drain | Side Ditch 


LOCATION 


Grubbing 


Clearing | 


E 

z 


« 

a 
e 
X 


— >> 
a to 

t- o 

Z 


Rate 

? Ct3 


1 




Sta. 

to 
Sta. 


Amo 
% 


unt 
Ota. 


m 
a 

Z 
C 


Brought ford. 




1 1 1 










1 


























- 






i« 
ii 
ii 
ii 

Blacksmith 




1 | 






o 

ill 
> 
o 

-1 
< 
e 
u 

< 

s 






















































■ B fe 

■a-i 






























1 

J 





— 




— 


Mules, Hired- 
Wheelbarrows 


-— 







- 




— 


3 
"el 


- 














'1 ' 






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1 1 












- 


— 




— 










- 


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Wheel Scr-p', s 
Dyn'mtte.Stks 
Powder, Kegs 


1 1 


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1(3 














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Total. 












REMARKS 
















rORCMAM- 



Fig. 163. — Daily report, railroad construction. 

to the fact that the men are distributed along the line of the 
road, a contractor's forces being scattered over many miles. 

1 Engineering-Contracting, Sept. 25, 1907, and Nov. 6, 1907. 



MISCELLANEOUS COST REPORT BLANKS 



399 



Under such circumstances the keeping of cost records of work 
done is essential to efficiency. 

Figures 162 and 163 show two daily reports for open cut work. 
They both go somewhat into details, but No. 163 more so than 



NORRIS & PEUGNET. 

MONTHLY RECORD Lester, W.Va...... 1904. 


CLASS OF WORK 


LOCATION 


ITEM 


AMOUNT 


REMARKS 


FOREMAN 
LABOR 
MULES 
HIKED TEAMS 
EXPLOSIVES 






. 1 . 




1 




i. . 




• 




















Prop. Charges 
Operating Exp's 
Int. & Depre'c. 
Superintendence 
Sundry Expenses 








j 




































TOTAL COST 








[ 






MONTHLY 
ESTIMATE 


Cu. Kfcp 4 


AMOUNTS 


1! 


DIF'ENCE 


RECEIVED tOSTt 


AM'TS |UNITS 


EARTH 
LOOSE ROCK 
SOLID ROCK 
| 






| 




































































TOTALS 






































LABOR. 


TOTAL 
DAYS 


CU. YDS 
MOVED 


CU. YDS. 
PER MAN 
PER DAY 












EXPLOSIVES 


am j t| 

IN 


CU. YDS. MOVED. 


AMOUNT 
USED 






LOOSE 
ROCK 


SOLID 
ROCK 


LBS . EARTH 




DYNAMITE 

POWDER 

ifUDSON 


















































TOTALS 

















Fig. 164. — Monthly report, railroad grading. 

No. 162. The latter has no spaces for explosives, blacksmith 
or feet of holes drilled, while No. 163 has spaces for these. 

These reports are made out by each foreman for the gang 
working under him, and a contractor should have but little 



400 CONSTRUCTION COST KEEPING AND MANAGEMENT 

trouble in judging quickly if any one gang is not being handled 
properly. 

Figures 164 and 165 are blanks for making a monthly resume 



A. J, NORRIS €t CO, Bonn4 


M ONTH'LY RECORD. Laynesville, Ky., Montli.™., ^..1903. 


EXCAVATION 


Cut | Borrow Pit | Foundation } Drain 


LOCATION 


Side Ditch 


Clearing 


Grutjblnjr 


S& 






_ 






— -o 














to 
Sta. 






£i 






o 












Ami' Estimate 






" aot'fies'yij 














X 

CD 

o 














" Secefwd , 






SostofWork 






Profit. 






00" 
















Loss 






REMARKS; 


























5 






















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Fig. 165. — Monthly report, railroad construction. 



of the daily reports. The value of the foreman's estimate of the 
amount of work done during the month on the form in Fig. 165 
is questionable. It is the engineer's estimate that counts. The 



MISCELLANEOUS COST REPORT BLANKS 



401 



P. F. B 


DAILY LABOR REPORT. 
NEW GALLITZIN TUNNEL. 
rendlinger. PENNA. RAILROAD. 

NTRACTOR. GALLITZIN, PA. 

1009 Arcade Building, 
















General Force. 


t | Cts. 


















Total 






EXCAVATIO N— D AY SHIFT 
West End. East End 


NO. 


OCCUPATION. 


H 


AMOUNT. 


KO. 


OCCUPATION.^ 


H 


AMOUNT. 




Heading. 










Heading. 




























































































































































































.:.:::::: 












Bench 




1 


Bench 






































































Drivers 

Water Boy 






















































































Shovel Cranseman 










































































Blacksmith Helpei 










































































Compressor Firem 














































































































Carpenter's Helpei 
























































Crossing Watchme 
































































Total 














1.... 


MASONR Y— D AY SHIFT- 
West End. East End 


NO. 


OCCUPATION., 


DAY" 


AMOUNT. 


.NO. 


OCCUPATION. 


K PER E 


AMOUNT. 




Rubble Side Walls. 










Rubble Side Walls. 












































































































Dinkey Brakemen 
































| 






























Concrete. 










Concrete. 






















































Outside Laborers. 
Hoisting Engineer 














































1 
















... ! 1 . . 
























portal. 


1 




Portal. 
Masonry Foremen 
























































Hoisting Engineer 
















































Total 
































Day Shipt. 










Day Shipt. 






















































































































































Total. 

























Fig. 166. — Daily report, tunneling. 



402 CONSTRUCTION COST KEEPING AND MANAGEMENT 

foreman's estimate, even if made with sincerity, is more than 
apt to be influenced by his desire to get a large amount of work 
done, in order to make a good showing for himself. 

These sheets are printed on manila cardboard and Figs. 163 
and 165 are reproduced natural size, while Figs. 162 and 164 
are slightly reduced. The first set was used on the Big Sandy 
extension, of the Chesapeake and Ohio R. R., while the other set 
was for use on the Deepwater Ry. 

Figures 166 and 167 are records of labor on tunnel construction 
only. The original sheet was 11 by 21^ in. The part repro- 
duced shows day shift only, but on the original sheet by the side 



West End Tunnel /Day- . 

\Night. 
East End Tunnel /Day.. . 

\Night. 



RECAPITULATION. 

GENERAL FORCE. 



West End /Day... 
\Night. 



RUBBLE SIDE WALL. 



East End /Day 

\Night 

Portal Masonry / West End. 
I East End.. 



West.End Tunnel /Day., 
\Night. 

East End Tunnel /Day.. . 
\Night. 

Quarrying Stone 

Floating Gangs 



CONCRETE MASONRY. 



Total 

Previous. ..... 

Total to Date . 



Signed Chiep Clerk, 



Fig. 167. — Daily report, tunneling. 

of the day shift was a reproduction of the same form for a night 
shift, the only variation being that as the stone quarry was run 
during the day only, this did not appear in the night shift's report. 
The form is large and rather cumbersome and does not show 
details of progress of the work. 

All these forms are subject to the criticism that the reports 
can not be made in duplicate on carbon copies. This is an im- 
portant feature in cost keeping, for obvious reasons. 

J. P. Hallihan, of El Paso, Tex., has described the following 
system which shows great care and ingenuity in its devising 
and includes some excellent forms. 

While it is not always necessary that the engineer should 
have a complete cost-analysis, showing subdivision of cost per 
unit of measurement, it is required that the cost per unit in vari- 
ous locations, as in each cut, should be at his command, as well 



MISCELLANEOUS COST REPORT BLANKS 403 

as the manner of handling, disposition of material and time con- 
sumed. 

Force reports in use in railroad work are not designed to 
secure this information, except in a very general way, usually 
giving a mere statement of force employed each day, without 
regard to costs. 

The accompanying forms were used on some recent work 
in the Southwest, and were intended to collect all the data re- 
quired in shape for condensation or further analysis, but the 
initial form was made as simple as possible, calling for no calcu- 
lation on the part of foremen. 

The field report (shown as Fig. 168) is bound in books of 35 
duplicate sheets, colored white and yellow, the white sheet 
being perforated for removal. In the case of company work, the 
form is filled in duplicate, using carbon, then torn out and the 
information called for on reverse side (distribution of labor and 
foreman's estimate of material moved or work done) is filled in, 
carbon impression being taken on reverse side of sheet retained 
in book. The sheet is then delivered to the timekeeper, who 
checks the time given on report against the time which he has 
personally taken, and forwards report to the division engineer. 
On isolated jobs, or with small gangs where no timekeeper is 
employed, the report goes direct to general foreman or division 
engineer. At the end of the month all books are sent to office of 
division engineer, who is thus put in possession of the original 
record of each day's work. 

Where the work is being done by a contractor, the data are 
obtained by force reporter using same form, omitting, of course, 
the names of employes and noting only the total number of each 
rate. The other information is obtained from foreman's 
statement, checked by personal observations. 

Figure 169 is a condensation of daily reports into a weekly 
report, showing distribution of force on each section and total 
cost for period covered. Quantities moved may be closely 
approximated from daily reports and profiles and inserted in 
weekly report, if desired. 

Accurate statement of quantities moved is, however, shown 
on the monthly sheet (Fig. 170) as derived from engineer's 
estimates. Figure 170 also shows total force and cost for month 
of work done on each section. It can also be arranged to show 
grand total cost of each section since commencement of work, 



404 CONSTRUCTION COST KEEPING AND MANAGEMENT 






FOREMAN'S DAILY TIME REPORT. 



Work done on sect. 

By 

Between sta 



...190... 
. Foreman. 



Time. Rate 



Time. Ratg. 



. 4-plow. . . 
. 6- plow. . . 
. 8-pk>w. . . 

.Slip 

. Fresno. . . 
.Wheeler. 
. Snatch . . 



.Supply. ,. . 

.Cart 

. Stone boat, 
.Wagon. .. . 

.Car 

.Water 

. In corral. . . 



Material Used. 


Pounds 

of 

Dynamite. 


Kegs 
Black 
Powder. 


Feet 
of 

Fuse. 


Number 
of 

.Caps. 


No. and 
length of 
Exploders. 


Sacks 

of 

Cement. 


Liters 
Black 
Oil. 


Liters 
Cy'l 
Oil. 































































































Class of work: 

Clearing. Excavation. Earth. 

Borrow. Waste. 

Tunnel No, Structure No. . 

Cross out wprds not necessary to express nature of work. 



Loose rock. 
Haul 



Solid rock. 
Meters. 



(over) 



Distribution or Labor. 


No, 


Employe. 


Time. 


Rate. 




































Drillers . 








































































































Miscellaneous: 










































- 








' 
















Foreman will fill this blank out daily and forward to timekeeper. 



Fig. 168. — Daily report, railroad grading. 



MISCELLANEOUS COST REPORT BLANKS 



405 



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406 CONSTRUCTION COST KEEPING AND MANAGEMENT 

and, for the use of a general contractor, this would obviously be 
required. 

The daily report form is used for all classes of work, the weekly 
and monthly reports being printed to conform to nature of work 
and information required. 

Cost -keeping System of Fred T. Ley & Co., Inc., of Springfield, 
Mass. 1 — We take up the system of Fred T. Ley & Co., who, as 
will be seen at the close of this article, have built many miles of 
electric railways, conduits, etc. The editor visited one line of 
railway work being done by this company some years ago and 
found that a very careful system of cost keeping was in use. 
Since the visit of the editor, the company has developed and 
improved its system, and, like all other firms of contractors who 
have once perfected a cost-keeping system, nothing could induce 
them to adopt the guesswork plan of cost keeping. 

Before describing the record blanks used by Fred T. Ley & 
Co., it is well to point out that their work has often been of a 
kind most difficult to keep track of. Frequently it has been 
strung out over 20 miles on one contract. Now, it is obvious 
that a system which is designed for use on work that is concen- 
trated within a limited area may need decided modifications 
when applied to scattered work. The features of the Ley system 
can best be understood from a brief description of the record 
blanks and their use. 

The timekeeper takes the time of each gang on Blank No. la 
(Fig. 171). He uses a separate sheet for each separate gang of 
men. He puts down each man's number, the hours worked and 
the rate per hour. One sheet holds the names of 30 men besides 
14 teams. These sheets are bound in a loose-leaf binder, as 
indicated by the holes. On the reverse side of each sheet is 
Blank No. 16 (Fig. 172), which is filled in so as to give the total 
cost of the day's work of the gang, the amount of work done, the 
location of the work, and the haul. In this case the work was 
located between Stations 1 and 8; the haul was 500 ft., and the 
output was 200 loads of gravel, at a cost of $41.48. Thus we 
have the cost of the work done March 15, on the cut between 
Stations 1 and 8. 

On every large job there are many general expenses that 
must be distributed over a number of gangs of men; for example, 
the salaries of superintendent, timekeeper, etc. These miscel- 

1 Engineering-Contracting, April, 1906. 



MISCELLANEOUS COST REPORT BLANKS 



407 



TIME SLIP 



wc. 



CONTRACT 



'W&L./fr \*°s~ 



NUMBER HOURS RATE 



fe-iv 



Io_ 



13L 



JOT. 



-XS- 



M- 



70^ 



-42- 



-99- 



Z&S 



44- 



-n- 



7Z4 



-XL. 



z/a 



-99- 



?zf 



-4*- 



1±A 



-XX- 



-49- 



$72. 



-99- 



-49- 



<?zs~ 



xl. 



-94- 
-*9- 



-i 



z& 



-It- 



'&&- 



-XX- 



-94- 



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M. 



4SL 



44H4&L 



-X$- 



-XX- 



-XX- 



-XX 



-&- 



-XX- 



-XX 



MISCELLANEOUS 



Fig. 171. — Front of timekeeper's sheet. 



408 CONSTRUCTION COST KEEPING AND MANAGEMENT 



FRED T. LEY & CO.. Contractors. 



TP Loa ,. ZZ 



»90^ 



Sta. 



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to 



fl Haul *5~OQ / 



FOREMAN 






COST 


/2^ 


a 




MEN 


HOURS 


RATE 








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/s 




/* 












































































TEAMS 


HOURS 


RATE 








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MISC. 


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TOTAL 


4/ 


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l J/LO^Zl 



MATERIA 



AMOUNT OF WORK 



Zov <&-a^c£4 



REMARKS 



FAIR 



Fig. 172. — Back of timekeeper's sheet. 



MISCELLANEOUS COST REPORT BLANKS 



409 



laneous charges are entered on a "miscellaneous sheet" like 
Fig. 171, and the total is divided up among the different pieces 
of work, pro rata. Thus, Fig. 172 shows that $2.48 was charged 
from the miscellaneous sheet. 



Contract No._... _ 


DAI 


LY REPORT. 


Contract. 


1 go 










HELP EMPLOYED. 




No. 


FOREMEN 


I 


No. 


LABORERS 








Foremen @ per hr. 


hrs. 








Men @ per hr. 


hrs. 
































































































































































































Total, 








Total, 








MISCELLANEOUS 








TEAMS 








@ per hr. 


hrs. 








Teams @ per hr. 


hrs. 








@ •■ •• I 














@ " - I 














® " 1 














® " |l 














@ 
















@ 
















@ 
















Total, 
















Total Pay Roll, 




























Time Keeper. 



Fig. 173. — Timekeeper's daily report. 

On large contracts, the timekeepers make out a daily report, 
Blank No. 2 (Fig. 173), which gives the total expense each day 
of the entire contract; and the total of the small detail sheets 
(Blank No. 16) must agree with the total of this large sheet. 



410 CONSTRUCTION COST KEEPING AND MANAGEMENT 



When the timekeeper takes his time in the morning, he gets 
from each foreman a supply report filled in on Blank No. 3 
(Fig. 174). This gives the amount of material used the day 
before on each particular kind of work. The timekeeper sends in 
these supply reports with his daily time slips. 

When the reports are received in the office, they are first 
turned over to the pay-roll clerk, who tabulates the time. When 
he is through with them he turns them over to the record clerk, 
who records them on the proper sheets. When the pay roll is 
made up every 2 weeks, its totals must agree with the totals on 
the time slips. 



SlA-flOlV. -- \90. 


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Foreman. 



Fig. 174. — Daily supply report. 

A summary of the time slips (Fig. 172) is entered on Blanks 
Nos. 4, 5 and 6 (Figs. 175, 176, 177), a separate blank being 
used for each cut and for each separate gang of men. Thus, 
Fig. 175 shows the cost of excavating and filling between Stations 
1 to 8, by days beginning with March 15. We see that the total 
number of loads was 200, and that the cost per load was $0,207. 
There is room to enter 29 days' work on the front side of each of 
these blanks, and as many more on the rear side. At a glance it 
can be seen what each day's work has cost per load, and the 
contractor is in a position to detect any increase or decrease in 
the cost, from day to day. This enables him to discover inef- 
ficiencies in men or methods — not weeks after the work is done, 
but the day after. 

Figure 176 is essentially the same as Fig. 175, excepting that 



MISCELLANEOUS COST REPORT BLANKS 



411 





































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MISCELLANEOUS COST REPORT BLANKS 



413 



columns are provided in which to enter cost of dynamite and 
exploders. The number of feet of hole drilled each day is also 
recorded, and the number of loads of rock hauled. 

Figure 177 is for concrete work, and is self-explanatory. 

Blank No. 7 (Fig. 178) is the pay-roll blank, and needs no 
explanation. 





Foreman 

Number Men .. 








- 


Day 




1907. 




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10 20 30 40 50 60 70 80 90 IC 
Units Of Work 

Key to Work Key fo Lost Time 

5 — Surfacing and lininq, rail lengths D - Dinner time 
T = Putting in ties, number Di ■= Gomy to work 

6 - Cutting grass on right-of-way, rail lengths Ds ^Putting up tools and going f 



ome. 



Fig. 179. — Daily punch card record of railway section foreman. 

In looking over these blanks we note especially the provision 
made for recording the work done by each gang of men at each 
cut, each culvert or bridge, etc., along the line of the work. The 
blanks are very simple in form, and the system is so flexible that 
it can be extended to cover many classes of work. The recording 
of earth and rock excavation by wagon loads or car loads is not 
absolutely accurate, due to the variation in sizes of loads; but 
when the number of loads is checked by cross-sections of the 



414 CONSTRUCTION COST KEEPING AND MANAGEMENT 

excavation, it will be found that the loads average a certain 
tolerably constant yardage under given conditions, and, by a 
little care, the contractor can be quite sure that the foreman is 
not sending out light loads so as to make a good record for a 
day's output. 

Fred T. Ley & Co. do a great deal of work on the percentage 
basis, but they keep just as careful a record of cost on percentage 
work as on regular contract work, not only because they want to 
keep the unit cost down as low as possible in behalf of their 
clients, but because a client is able to visit the work at any time, 
count the men in any gang and check the accuracy of the time 
keeping for himself. 

Record Card for Railway Section Foremen. 1 — The diagram, 
Fig. 179, is a record card to be used by section foremen, and it 
shows the day's work done by a gang of section men. The ver- 
tical lines, or ordinates, show the hours of the day from 7 A.M. to 
6 P.M. and the intermediate quarter hours. The horizontal 
lines, or abscissas, show the number of units of work accom- 
plished. The black circles are holes punched with a conductor's 
punch. The lines connecting the punch holes can be ruled in 
after the day's work is done. 

This particular card shows that the gang of men arrived at 
the site of the day's work and started in at 7:30 A.M. At 10 
A.M. they had completed 10 units of work, and the key letter $ 
on the straight line between 7:30 and 10 A.M. is found to be the 
number of rail lengths of track surfaced and lined. At 10 A.M. 
the gang began putting in ties, as is indicated by the key letter 
T on the straight line between 10 A.M. and 12 M. Then the 
curve of work rises vertically from 12 M. to 1 P.M., indicating 
that no work was done during the noon hour. From 1 to 
2 P.M. the work of putting in ties was continued. At 2 P.M. 
the gang began cutting grass, as is indicated by the key letter G, 
and quit at 5 P.M., having cut grass for a distance of 55 rail 
lengths. Then the curve of work rises vertically from 5 to 
6 P.M., and the key letter D 2 shows that this hour was lost in 
picking up tools and going home. 

It will be noted that a card of this sort gives a perfect log 
of the day's work, showing all delays, their cause and duration, 
and number of units of work accomplished. On the back of the 
card a series of key letters should be printed so that the fore- 

1 Engineering-Contracting , July 17, 1907. 



MISCELLANEOUS COST REPORT BLANKS 415 

man can indicate on the curve of work any kind of work done, 
and the units in which it is measured. The rail length is a con- 
venient unit for certain classes of work; the distance between tele- 
graph poles may serve for other classes. Incidentally, all tele- 
graph poles on each section should be numbered consecutively. 
Then the foreman can be required to report the exact location of 
the work by putting the number of the pole on the curve of work 
diagram. 

The card shown herewith is obviously applicable to innumer- 
able kinds of construction or manufacturing where men work as 
individuals or in gangs. It becomes complicated when a gang 
under a foreman is split up into smaller gangs which are con- 
tinually shifted from one kind of work to another. But such 
shifting is usually unnecessary, and can be obviated, as a rule, by 
the use of better judgment in the management of the work. In- 
deed, this very objection to the use of such daily card reports 
points the way to better management by indicating the lack of 
reason for splitting gangs up into small units that putter away 
time. 

A Cost-keeping Bookkeeping System for Pipe Line Work. — 
W. W. Cummings, M. Am. Soc. C. E., has described in Engi- 
neering News for October 2, 1902, a system of cost-keeping book- 
keeping, which description we herewith reproduce: 

It often happens that an engineer is confronted by the prob- 
lem of doing a certain amount of work with a limited sum of 
money, and the only way he can keep the cost within the required 
limits is to so systematize the reports that he can see at any time 
what the expenses are for the different items and trim them ac- 
cordingly. In the ordinary methods of bookkeeping, unless a 
considerable force is kept on the accounts, the knowledge of 
excessive cost is obtained too late to be of much benefit to the 
work in hand. 

In the construction of the Massachusetts Pipe Line Co.'s 
mains, the writer has occasion to regret that no previously tried 
system was available, and after considerable study devised the 
following methods, which may possibly be used as a base in 
similar cases. 

When the Massachusetts Pipe Line Gas Co. commenced to lay 
its mains, it was given a limit of cost of $9 per lineal foot, com- 
plete, which was to include all repairs and changes to other pipes, 
conduits, sewers and paving. Much of the route was through 



416 CONSTRUCTION COST KEEPING AND MANAGEMENT 

districts congested by travel above and obstructed by existing 
structures below. 

The work consisted of laying: 2% miles of 42-in. pipe, laid 
in a double line; 3^ of 36-in,, double; 1^ of 36 and 30-in., side 
by side; 7 of 36-in., single; 1 of 24-in. pipe, single. Also three 
river crossings. Three contractors were employed on the work. 

Rates of labor were as follows: 

Foreman $0 . 45 per hour. 

Subforeman .35 per hour. 

Subforeman . . . .30 per hour. 

Bracers .25 per hour. 

Calkers .25 per hour. 

Pavers 4. 00 per day (9 hr.). 

Tenders 2.00 per day (9 hr.). 

Laborers: Derrickmen, bottommen, bracers' tend- 
ers, pavers' tenders, pipe layers, leadmen .20 per hour. 

Laborers .18 per hour. 

Laborers . 17J^ per hour. 

Laborers .17 per hour 

Laborers .16 per hour 

Laborers .15 per hour. 

Blacksmith .20 per hour. 

Blacksmith's helper .15 per hour. 

Lampman ; .15 per hour. 

Toolman .20 per hour. 

Watchman .15 per hour. 

Carpenter .25 per hour. 

The office force consisted of : 

1 bookkeeper $60. 00 per month. 

1 timekeeper for each contractor 80. 00 per month. 

1 timechecker for each gang 12 . 00 per week. 

1 engineer for each contractor 75 . 00 per month. 

1 rodman for each contractor 50. 00 per month. 

1 yardman for each yard 60 . 00 per month. 

The timekeepers and checkers were men selected for their 
reliability and diligence and were paid good wages. The 
checkers patroled the line at irregular intervals, at least every 

2 hr., and returned a slip to the timekeeper showing the men and 
teams at work each trip with the date and time on each slip. 
The entire route was mapped and separated into divisions and 
sections. The different cities constituted the divisions, and were 
let to different contractors, while the sections were divided ac- 
cording to the anticipated character of the work. That which 



MISCELLANEOUS COST REPORT BLANKS 



417 



required piling being one section, that containing rock cut an- 
other, where the line crossed private land, passed under the 
various kinds of street surfacing, was near a railway, etc., each a 
distinct section. The idea being that the cost of these different 
classes of work would show in the reports of the sections without 
further separation. 

Five receiving yards were established along the line, where 
all pipe and material were delivered. Here the pipes were in- 
spected, and a number was marked on the inside of each one with 
white lead. 



MASSACHUSETTS F»IF»E LI1NE GAS CO. 



DAILY PIPE REPORT. 



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MASSACHUSETTS PIPE LIINE GAS CO. 

DAILY t PIPE REPORT. 

Mtractor ...T\^fcA«T.. 1 0^.^L..^0-»di.C^a..... "VoaJU; VI Ma\A Date - j4c s - s ^*V.-- r (^??~*~,—l8&) ■ 



WEIGHTS, AND TEAMSTERS 



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DESTINATION 



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Fig. 180. — Daily pipe report. 

A report, Fig. 180, was made in triplicate, containing this 
data, together with an account of everything shipped from the 
yard, the division, section and foreman shipped to and the team- 
ster hauling the load. One copy of this report was sent to the 
office daily, another was forwarded to the auditor and the third 
remained in the book as a record. The timekeeper was required 
to return a daily report for each gang, made in duplicate, show- 
ing the number of men of different classes employed, the rates of 
wages, the daily wages and the total wages to date, on each sec- 
tion on one side, while a list of the tools in use with the daily and 
the total rentals, if any, were sho n on the reverse side. He also 
noted on this card the numbers of the pipes received and their 
condition, and the other material received. This report guarded 
against loss of tools and material in transit to the work. 

Of course the total daily payroll of the card checked that of 
the time books. Figure 181 describes this report. 

27 



418 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The division engineer was required to return daily reports for 
each section (Fig. 182) made in duplicate, showing the excavation, 
back-fill, paving, repairs made, material used, the numbers 
of the pipes laid in their order, with remarks covering anything 



MASS, 


PIPE LINE GAS CO. 


Foreman.ZoCO^WXXrfM--. 's Report No. ■* / 

Work „ „ „-Date..W!«. ..*] ifM 

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Reverse Side. 
Fig. 181. — Daily payroll report, pipe laying. 

that would affect the cost. This guarded against the loss of 
material while on the ground. Both the engineer's and time- 
keeper's reports were cards of convenient size for the coat 
pocket, and stiff enough to avoid crumpling, bound in book form, 



MISCELLANEOUS COST REPORT BLANKS 



419 



peforated, and having a thin sheet of parchment for the 
duplicate. 

At the office the bookkeeper entered the pipe as ordered and 
the data from the cards on a page (Fig. 183), which gives the 
pipes ordered, received, to come, delivered to each section, laid 







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Front. Reverse. 

Fig. 182. — Daily progress report, pipe laying. 



in each section, on hand, and the length as obtained by average 
laying length (used as a check). 

Nearly all the pipe and specials were ordered from the McNeal 
Pipe & Foundry Co., and the R. D. Wood Co., and the columns 
headed "McN." and "W." refer to the castings from those 
dealers. 

The bookkeeper also had a ledger account in detail (Fig. 



420 CONSTRUCTION COST KEEPING AND MANAGEMENT 

184) which he took from the reports showing the material re- 
ceived, used, and transported from each section. This account 





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served to simplify the entries to be made on the page ruled, as in 
Fig. 185, and further guard against loss. 

In practice the daily report cards from the yards, the time- 
keepers and the engineers were mailed the evening of the day 
recorded and reached the office at 8 A.M. The bookkeeper made 



MISCELLANEOUS COST REPORT BLANKS 



421 



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422 CONSTRUCTION COST KEEPING AND- MANAGEMENT 

his entries on the pages, described by Figs. 183 and 184, and 
transferred his totals to the page, described by Fig. 185, which 
made the information in detail for the day recorded available by 
noon of the following day. 

The results were combined in a similar manner for each 
division, as shown by Fig. 185, and again for the entire work. 
These totals were made up each week unless required oftener by 
the bad showing. 

The bookkeeper also compiled a record of the pipe from the 
yard keepers' and engineers' reports on a page ruled as shown in 
Fig. 186, by which any lost pipe could be traced and damage 
assessed. 



MASSACHUSETTS PIPE LINE GAS COMPANY. 

July 7th, 1899. 
PAIR: 

Mr. Cummings in office 8:10. Tunnel, Boston, Rox- 
bury, Brookline, Cambridge, office 5:46. Sullivan in 
office 8:10, 95 Milk St., office till 5. Tabor in office and 
works all day. Silsbee and Jeeves in office all day. 
Murry and assistants in Roxbury, Brookline and Jamaica 
Plain. Hayden and assistant in Cambridge giving grades. 
Div. D. Sees. 1 and 2, Cambridge. 

Laborers 233 Engineers 2 

Carpenters 3 Pumpmen 20 

Blacksmiths 1 . 

Night-watchmen 12 Total 270 

Day watchmen 10 

Derricks 1 Supply wagon 1 

Furnaces 2 Single carts 1 

Blacksmith kits 1 Double carts 40 

Pumps 5 

302 lanterns out. Sec. 1, %-yd. concrete, 140 sq. yds. 
paving, 60 ft. edgestones, 114 yds. brick laid, 45 ft. pipe 
raid, 8 joints, calked, 8 pigs lead used, 1 sewer connection 
made— 25 ft. 5-in. pipe, 1 6-in. % bend used. 

Sec. 2. 175 ft. trench opened, 75 ft. back filled and pud- 
dled, 268.84 ft. pipe laid 17 joints calked, 15 pigs lead 
used, 15 piles driven, 8 caps used. 



Fig. 187. — Daily report to president. 

A "Division of Labor" sheet, showing the cost of the dif- 
ferent items, was sent to the auditor each week. He also 
received the bills, and kept independent accounts. A daily 
report, illustrated by Fig. 187, was sent to the president and 
chief engineer. 

The division engineers also kept field books, giving the grade 
and laying length of each pipe, and the pipe numbers, in the order 
of their laying. The intersections of cross street lines and im- 
portant underground structures were noted by station, the loca- 
tions of each special were tied in to permanent points and the 
lateral distances from street lines and other pipes, sewers, con- 
duits, etc., were noted. 



MISCELLANEOUS COST REPORT BLANKS 423 

When repair work was done by city men, a report of the 
labor, materials and prices was added to the engineer's card, 
together with the location of the repair. This was credited to 
the city on a page for that purpose, and when the bill was 
presented it was "0 K'd" from that page. 

The highest cost per lineal foot of pipe was $11.61, including 
all repairs, pipe, etc. This was one 36-in. pipe in rock cut, with 
a 12-in. gas main on one side and a water pipe and sewer on the 
other. 

The lowest total cost per lineal foot of pipe, for two 36-in. 
pipes side by side, was $8.16; do., for one 24-in. pipe, $4.29. 

The average total cost per lineal foot of pipe was $8.36. 

The average total cost of pipe per lineal foot was $4.20, in- 
cluding specials. * 

The cost of pipe per ton was $17.50 f. o. b. Philadelphia. 
The cost of specials was 2% cts. per pound. 

The average cost of excavation (including sheeting) was 
$1.86 per linear foot; for laying (including lead, etc.), 62 cts.; 
backfilling (including surfacing), 72 cts.; handling (includes 
unloading cars and piling in yard) was 76 cts. per linear foot. 

This does not include engineering other than as above men- 
tioned. The location sheets were as shown by Fig. 188, giving 
the station of the side streets and specials, with the lateral dis- 
tance from street lines and other pipes, conduits, etc., wherever 
obtainable. Each special is tied in from permanent points, so 
that any joint can be found by locating a special and measuring 
the distance given in the field books, while keeping on the offset 
from the street lines. 

A further compilation was started, as outlined in Fig. 189, 
which is modeled on the form used at Halifax, N. S. This gives 
at a glance all the information connected with the line, but 
requires a great deal of time. In the case of the Massachusetts 
Pipe Line Gas Co., it was reserved for winter work. 

In case of repairs and leaks, slips (Fig. 190) modeled after 
those of the Boston Gas Light Company, W. R. Addicks, engi- 
neer, are filled out and filed in a card index under the heading of 
street names. 

Each drip is numbered from the Everett works and a record 
(Fig. 191) is kept of the depth of drippage and the gallons 
pumped each visit. The drip wagon contains about 200 gal., 
and has a float whose spindle is marked every 25 gal. By 



424 CONSTRUCTION COST KEEPING AND MANAGEMENT 




MISCELLANEOUS COST REPORT BLANKS 



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MISCELLANEOUS COST REPORT BLANKS 



427 



tabulating for each drip the measurements in inches and the num- 
ber of gallons pumped, it was easily seen about how much drip- 
page there was for each inch, even though the water extended 
into the pipe (which is often the case in some drips where the 
pipes have a slight fall), so that a measurement now gives the ap- 
proximate gallons to be pumped. Each valve is lettered from 
the works. 

These drips and valves are located in the usual way by sten- 
ciling rectangular coordinates on permanent nearby points. All 
drips are sounded and the valves started once each month. 

It would be unfair to close without tribute to the resource- 
fulness and push of L. J. Hirt, who was the chief engineer during 
construction. 



MASS. PIPE LINE GAS CO. 

/S99 /9O0 


tri, 

Number 


MONTH 


DAY 


GALS. 


D.ptl. 


MONTH 


DAY 


GALS. 


Depth 


MONTH 


DAY 


GALS. 


Dtplh 


MONTH 


DAY 


GALS. 


Depth 


1 


»«-« 








%7ka. VS. 


Fr, 




35' 


flaw lo 


fUa 




-?P" 


9S&7. 


>M 




'f 


£ 








/o ~ 




, 




/3 ' 


.. .. 






'2' 








o " 


3 


., . 






zo' 








22 " 




P 




,s- 








/O" 


























—* 








o- 



Fig. 191. — Drip record. 



Cost -keeping System of the Kosmos Engineering, Co., New 
York City. 1 — The system about to be described differs materially 
from any of the systems previously illustrated. It should be 
stated in advance that the Kosmos Engineering Co. had the 
contract for building the Brooklyn anchorage for the Manhattan 
Bridge, the wire cable suspension bridge across the East River 
at New York City, and that the blanks shown in this article 
were especially designed for that work. The system, however, 
is of general application, as will be noted later on. 

The first noteworthy feature of the Kosmos system of cost- 
keeping is the absence of blanks to be filled in by the foremen. 
The foremen are provided with pads of paper on which they write 
each day the number of men in the gang and their respective 
duties and rates of wages. If the work is of a kind that admits 
of easy measurement, the foreman reports also the amount of 
work done. On the whole, however, very little is required of the 
foreman except a statement of the number of men, their occu- 
pation and the rates of wages. These he can give on any slip of 
paper, no printed blanks or rules of procedure being insisted upon. 

1 Engineering-Contracting, Mar. 13, 1907. 



428 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The foreman's report with the timekeeper's book go each 
day to the bookkeeper. They, of course, must total up the same 
amount of daily pay account, and it is the bookkeeper's business 
to verify this fact. The verified records and time sheet go next 
directly to the superintendent's assistant, who analyzes them 
and distributes the costs to the proper accounts. The superin- 
tendent's assistant is himself a civil engineer capable of checking 
all measurements and estimates of quantities. The office is 
directly on the work so the assistant sees every part of the work 
himself several times daily. In a word, all analysis of costs is 
done in the office of a competent man, who is, moreover, in con- 
stant touch with the construction work, and so does not require 
a very elaborate report from the foremen. 

Now as to accounts. In this particular contract all costs 
are charged under six general headings to a number of different 
items, each of which has its account in the ledger. Of course, 
the items vary somewhat from time to time, but the accompany- 
ing schedule gives a generally fair idea. Keeping to the labor 
accounts for the present, th superintendent's assistant, in analyz- 
ing the foremen's reports and time sheets, record his distribution 
of cost on blanks 9% X Q}4 in. in size and of the form show 
in Fig. 192. These blanks are kept in a filing case and are avail- 
able for inspection at any time and give a complete record of the 
labor cost of the work at any time; 

The pay-roll vouchers are made out every two weeks and 
are made out from these blanks. The totals from the blanks are 
recorded on the back of the voucher in properly ruled spaces. 
Thus each pay roll voucher is its own record not only of the total 
pay roll, but of the items making up that total. These vouchers 
go to the bookkeeper and from them he takes the amounts to 
be charged to the several accounts. The bookkeeper merely 
transcribes the amounts. 

So far reference has been had entirely to the labor cost ac- 
counts. The bills for materials, supplies, etc., are also analyzed 
by the superintendent's assistant, who proportions or distributes 
the costs to the proper accounts. This distribution is given on 
the back of the voucher for every bill, and here again the book- 
keeper has simply to transcribe the several amounts to the 
proper accounts. 

The foregoing covers the main scheme for keeping costs. Its 
noteworthy features are that the foremen are called upon to do 



MISCELLANEOUS COST REPORT BLANKS 429 



KOSMOS ENGINEERING CO. 


CONTRACT No. 1 

LABOR 

GRANITE 




OATE 


Unloading »nd Distributing 


DRESSING 


TRANSPORTING 


tort^SM*! 










COST 








cos. 




COS, 




CO,, 




.•os. 








































































i 


KOSMOS ENGINEERING CO. 


CONTRACT No. 1 

LABOR 

EXCAVATION. 






DATE | LABOR IN PIT 


STONE BREAKERS 


TRANSPORTATION 


LOADING ■■<! 
TRIMMING SCOWS 


BACKFILLING 








COST 




cos. 




COST 




COS, 




COS, 




COS, 








































































1 








KOSMOS ENGINEERING CO. 


CONTRACT No. 1 

LABOR 

CARPENTERS, ELECTRICIANS. 






DATE H CONCRETE FORMS 


ARCH CENTERS 






ELECTRICIANS 


MACHINISTS 


WATCHMEN 




— 


COST 




COST 




COS, 






COS, 




CO,, 








1 
1 
































KOSMOS ENGINEERING CO. 


CONTRACT No. 1 

LABOR 

FOUNDATION PILES, SHEET PILES AND BRACES. 


DATE | SHEET PILING 


BRACING 


FOUNDATION PILES 


PUMPING 






IS? 


COS, 


"••"• 


COS, 




COS, 




cos, 




COS, 




cos, 






































\ 






l 
































KOSMOS 


ENGINEERING CO. 


CONTRACT No. 1 

LABOR 




CONCRETE 


CYCLOPEAN 


DATE 


MIXING 


T,„,p 




Hoirtlng »«d 


TOTAL 


CU TDS 


ComCu Y< 


Tfiniportufon 


Hoirtlngind Selling 


CU.YOS. 


































~T 






























KOSMOS ENGINEERING CO\ 


CONTRACT No. 1 

LABOR 

UNLOADING AND HANDLING CONCRETE MATERIALS. 


DAT( 


CEMENT 


CONCRETE STONE 


SAND 


CYCLOPEAN 








co„ 




CO,, 




COST 




co„ 




co„ 




CO,, 









































































Fig. 192. — Blanks for distribution of costs. 



430 CONSTRUCTION COST KEEPING AND MANAGEMENT 



only the simplest kind of record-keeping and that the analysis of 
costs and their distribution to the proper accounts are performed 



KOSMOS ENGINEERING CO. 
DAILY CEMENT REPORT 

_ 190 


KOOFB.O. 


wJSKJ.. 


w. D „»s:„ 


Bo.. 


TOTAL 


On hand start of day 










Used during day 










On hand close olday 




1 














Sign 









Fig. 193. — Daily cement report. 

by one of the regular engineering staff who is in constant touch 
with every detail of the work. It is evident that the system as 



KOSMOS ENGINEERING CO. 
EMPTY BAG ACCOUNT 

Report for 



.190 



No 



No. of empty bags placed 
in stock during day.. 

No of empty bags 

ehippecLduring day 



No of empty bags on 

hand at close of day 



Fig. 194. — Daily empty bag report. 

described for one specific job is applicable to general contract 
work by making obvious modifications in details. 



DAILY COST OF ELECTRICAL CURRENT CONSUMED. 



Meter No.-i. Anchorage, Present Previous 

" a. Mixer& Docks "' " 

" " ). Railorad " . " 

Total Watts consumed: Anchorage 

Mixer & Docks 

*■ M !• Railroad , 

Arc Lights 

Time Previous Readings ._ A. M. 

" Present " A. M 

Remarks ; , , „ ___ 



_P. M._ 
._P. M.- 



Fig. 195. — Daily record of electricity used. 

Besides the labor cost blanks shown in Fig. 192 , the Kosmos 
Engineering Co., on the work referred to above, make use of a 



MISCELLANEOUS COST REPORT BLANKS 



431 



variety of other blanks for keeping the daily run of expenses and 
the condition of the stock of supplies and materials. Figures 193 
and 194 show the blanks for keeping track of the cement stock 
and the empty bag account. Figure 195 shows a blank for 
keeping tab on the daily cost of electric current consumed. 
This serves the purpose of checking up the bills rendered for 



MOTOR CAR NO.. 



Time Finished 

No. of Hours at 

Cost for* Day 

No. of Cars in Train 

No. "f Trips 

Kind of Materia) hauled 

Amount of Material hauled- 



-A. M.. 
-A. M._ 



-P. M__ 
-P. M. . 



Fig. 196. — Daily record of motor car performance. 

current and of detecting waste or other neglect. In a similar 
way, by means of the blanks shown in Figs. 196 and 197, a daily 
record is had of the work done by each motor car and hoist. 
Each hoist, derrick and motor is also inspected at frequent 
intervals and there are blanks for the inspector's reports. The 






































Fig. 197.. — Daily record of derrick performance. 

operators of the several machines also have blanks on which they 
are required to report needed repairs. In a word, the company 
strives to know by actual reports the condition every day of its 
machinery, tools, supplies, etc. These detail records are, of 
course, not absolute essentials of the cost-keeping system proper, 



432 CONSTRUCTION COST KEEPING AND MANAGEMENT 

but they combine with that system to make every detail of the 
work efficient. 

Blanks for Recording Work of Well Drills as Used by the 
Nevada Consolidated Copper Co. 1 — Recording the work done 
in . concise and convenient form is a very important item in 
prospecting with well drills. Daily time cards should be filled 
out by each drill man as he comes off the shift. Sample cards 
are shown by Figs. 198 and 199. The card shown in Fig. 198 is 
for recording the cost of the work and that shown in Fig. 199 
is for keeping a general record of the work. From the daily time 
cards the superintendent makes up his report to the company at 
the completion of each hole. 



DRILL RECORD 

Nevada Consolidated Copper Co. 

For the Shift ending 190. 

Previous depth of hole 

Present depth of hole 

Number of feet drilled ;....-. 

Hours drilled 

Hours Lost 

Barrels of water used 

Cords of wood used 

Formation -. 

Location of Hole 

Number of hole . 

Drill man's wages 

Helper's wages S 

Cost per foot of drilling this shaf $ 

REMARKS: , 

• SIGNED 

FOREMAN 



Fig. 198. — Daily record of test hole drilling. 



Form for Keeping Account of Cars of Materials. 2 — George R. 
Humphrey, member of the firm of Joseph Ross Co., bridge 
builders and general contractors of Boston, Mass., sends us the 
form shown in Fig. 200. Mr. Humphrey has used this form for a 
number of years to keep account of materials received in carload 
lots. 

The form records the number and initial of the car, time of 
arrival and delivery and also when the car is released. The 
material man keeps this record and obtains from the railroad 

1 Engineering-Contracting, July 3, 1907. 

2 Engineering-Contracting, Nov. 20, 1907. 



MISCELLANEOUS COST REPORT BLANKS 



433 



agent the time of arrival. This form is ruled up in a small 
memorandum book, and on the adjoining page is kept a record of 
the material received in each car and the amount, such as 15 tons 
stone, or sand, 12 M. ft. of lumber and other materials. 

Mr. Humphrey writes that this record shows at a glance 
what cars are on demurrage or those about to go on demurrage, 



DAILY DRILLING RECORD 

Nevada Consolidated Copper Co. 

Ruth, Nevada , , 190. 

To t , 

Mr Vf General Manager 

' brill Rig'No. 1 

Location. Name of Claim 

Present depth of hole 

Previous depth of hole 

Feet of drilling this shaft 

Hours drilling 

Hours lost * 

Drill man'-: name -. 

Helper's name 

Drill Rig No. 2 

Location. Name of Claim 

Present depth of hole 

Previous depth of hole -. 

Feet of drilling this shaft 

Hours drilling. 

Hours lost .' •. 

Drill man's name 

Helper's name ■ 

Above report Is for time ending 

Remarks 

I ■ ■■■ 

Fig. 199. — Daily record of prospect drilling. 



thus showing the material man the cars to be unloaded first, 
when there is more than one car waiting to be unloaded. Bills 
for materials can also be checked up from this record, and freight 
bills paid only for cars that have been received. 

Being in book form, previous day records can be quickly 
looked up, and the records of cars received for each contract can 
be kept in one book and readily filed when the job is completed. 

We might add that in addition to the information kept by 

28 



434 CONSTRUCTION COST KEEPING AND MANAGEMENT 



.. 

CEMENT. 


Note 
$1 dm 


Car No. 


Init. 


Arrived 


Delivered 


Released 


45913 
69149 


NYC 


9-5' 11 am 
" 3 pm 


9-7 2 pm 
9-8 11 am 


9-8 9am 
9-13 IQ am 





Fig. 200. — Record of freight cars. 



United States Department of Agriculture., 
office of public roads. 




Force Employed. 


Work Done. 




Total 

in 
hours 

or 
days. 


Pay 

per 
hour 

or 
day. 


Total. 


Earth excava- 




Sta. '.to Sta. . 
Sta.. to Sta. . 
Sta. .to Sta. . 
Sta . . to'Sta . . 
Sta . . to Sta . . 
Sta. .to Sta... 


Subgrade 

shaped <J 

First course 


., .sq. yds. 














Second course 




























Surface course 




























Road surface 
completed. . . 
Material 


. . .sq. yds. 
























































Engine and 


















Hauling [To crusher 
surfacing -j 












Materials Used, Paid for by Unit 
Measure. 












Loading surfacing, 














Quantity. 


Price. 


Total; 


Spreading surfacing 








































Surfacing ma- 










. . . .masonry 






















Fuel for 


































Fuel for 


































Oil, waste, re- 


































Drain p i p e, ; 














































































































' 


























Total 



















































Fig. 201. — Daily report, road construction. 
(Engineering-contracting, Nov. 13, 1907.) 



MISCELLANEOUS COST REPORT BLANKS 



435 



Mr. Humphrey, a few columns might be added to show cost of 
unloading cars and hauling material. One of the authors used a 
similar form some years ago. Besides showing the record as 



L P.E. Form 11 « 

STATE OF NEW 

department of State Engineer anb Surveyor- 


YORK 

-Improvement of public Wftjbwaua 


PROGRESS REPORT 


Contractor 


Rough grading completed Sta. to Sta, , Lin. ft. , Total to date, Sta. to Sta. 


Bottom course laid " " " , " " * " " " " " 


Top course laid " " " . " " . " " " *• " 






No. of days roller worked __„ No. of dars crusher ruu 


No. of days sprinkler worked LABOR REPORT No. of days traction engine used 




S. 


v.. 


T. 


W. 


T. 


F 


S, 


TOT A 


RATE 


AMOUNT 


DIVISION Of LABOR EXPENSE 


Foremen 


























Item 




Engiaemen 


























Clean nc; and prubbing 






Drillmen 


























Excavation for embankment ) 






JI.'JODS 


























Hauling materials for maradarq 






Carpenters 


























Quanrinff and cmshins stone 






Laborers 


























Ptarinr anrl ffitMifng mnm-bm 






Teams 
































Carts 


























Concrete 
































































































General expenses 






total labor expense for wee 








Total 






MATERIALS REPORT 


1 SBrTY 


ITEM 


RATE F.O E 


AMOUNT 


ilii'THO- 
HAULTOV.'ORK 


REMARKS 


Cu j-di 


Bottom course stone delivered at 














Cu yds. 


Top course stone delivered at 














Cu yds. 


Screenings delivered at 














Barrels 


C iment delivered at 














Ft. b. m. 


Lumber delivered at 














Lin ft. 


Vitrified Pipe (Diam. in.) delivered at 














Pounds 


Steel at 














Cu. yds. 


Sand for concrete at 














Cu.yds. 


" " filler at 














.. Tons 


Coal 






























Total materials eipeuse to wee 












EQUIPMENT REPORT ENGINEERING FORCE ACCOUNT 


"fcr 


(TEH 


HAKE 


REMARKS 


NA*E 


S 


I 


T 


V. T 


F 


s 




Crushers 






















Steam rollers 






















Traction engines 






















Sprinklers 






















Carts or wagons 






















Steam drills 






















Scrapers 




























In charge 








•rr Dinicrraiis ox Kcviini otoi 


Address 













Fig. 202. — Engineer's weekly report, road construction. 

given here, he had a column for foreman, if one was in charge 
of unloading, a column for the men, one for the teams, and one 
to show the approximate length of haul. 



436 CONSTRUCTION COST KEEPING AND MANAGEMENT 



This record besides giving a cost of the work done, allowed 
the contractor to know if the work was done with dispatch 
and prevented the men from idling away their time, as they are 
likely to do when a few men are sent off by themselves to do 
such work. In a column for remarks notation was made if any 
material or goods were received in bad condition. 

Cost-keeping Blanks for New York State Road Work. — In 
the road work done by the state of New York, each engineer in 
charge of a road contract is provided with a weekly report blank, 
shown by Fig. 202, which he is required to fill out from careful 



ipmms- 




Road Nc 


. _. _ .... Cc 


ntract 




«^ mam 


Cnst of 




from 




-TOO tO ,.,... I90 


LABOR ACCOUNT 


MATERIALS ACCOUNT 


EQUIPMENT 


Time 


Rank 


Rate 


Amt. 


Quan. 


Item 


Rate 


Amt. 


Item 


Value 






















































































































Total 




















SUMMARY 


















Labor expense 




















Materials expense 




















Depreciation of plant 




Total 




Total 




Interest on investment 




Dcscriptio 


i o[ Work and Conditions 






Administrative expense, etc. 












Total 






No. of Units - 












Cost per Unit 













Fig. 203. — Special cost report, roadwork. 

notes taken throughout the week. These reports are the basis for 
the progress charts showing the rate of progress on each contract. 
They also furnish the necessary information for the cost data de- 
partment. Special cost blanks like the one shown by Fig. 203 
are also furnished. These' reports are used in cases where excep- 
tional opportunity offers to obtain the cost of any item of work. 

The inspectors on the work keep an accurate account of the 
number of men employed and materials furnished, and report 
them daily to the engineer in charge. On the last of each month 
estimates are made out and sent to the division engineer, by the 
engineer in charge of the work, for the amount of work done dur- 
ing the month. These estimates are checked and signed by the 



MISCELLANEOUS COST REPORT BLANKS 437 

division engineer and forwarded to the state engineer. They are 
again checked and compared with the original contract on file in 
the state engineer's office, and if found to be correct, the con- 
tractor is paid 90 per cent of the said estimate. 

Discussion of Cost Keeping: Smelting Plant, Railroad, and 
U. S, Reclamation Service — Construction. — We reprint herewith 
some discussions of a paper on cost keeping by Myron S. Falk 
and published in Transactions Soc. Am. C. E., Vol. LXIV, p. 401. 
We would call particular attention to the last paragraph of Mr. 
Hammatt's discussion. Note also his distinction between fixed 
and movable plant. In his work a good deal of plant may be 
classed as fixed; while in ordinary contract work most of the 
plant is movable. 

W. C. Hammatt, Assoc. M. Am. Soc. C. E. (by letter). — When in 
charge of various pieces of construction, the writer has always 
endeavored to keep close and accurate costs, in order to check, 
not only the unit costs of different classes by previous work 
of the same class, but also to present to the company, at the end 
of the work, an accurate and minutely itemized valuation of the 
work done, for inventory and insurance purposes. He has used 
practically the same system in his work as Superintendent of 
Construction for the Mountain Copper Company, at Martinez, 
the American Smelting and Refining Company, at Chihuahua, 
Mexico, and the Mammoth Copper Mining Company, at Kennett 
Cal.; therefore, only one of these cases, for example, the con- 
struction at Chihuahua, will be described. 

The first step of the system involved giving a segregation 
number to each piece of work. This minimized the clerical work, 
and also gave convenient reference to ledger accounts. In this 
system of segregation whole numbers are used for the main divis- 
ions of work and decimals of various length for the sub-segre- 
gations under these divisions. This provided for a combination 
of all the decimals of a certain degree when segregations of lesser 
refinement were necessary for certain purposes. For example: 

Construction Schedule 
General Expense: 

01 Superintendence. 

02 Surveying and drafting. 

03 Office expenses. 

04 Proportion, main office. 

05 Temporary tracks. 

06 Tools, push cars, concrete mixer, 



438 CONSTRUCTION COST KEEPING AND MANAGEMENT 

07 Real estate. 

08 Warehouse stock. 

09 Warehouse expense. 

Blast Furnaces: (These sub-heading apply to all 

10 Building. following headings.) 

11 Furnace No. 4, bustle pipe 0.1 Grading. 

settler, etc. 0.2 Forms. 

12 Changes in present furnaces. . 3 Concrete. 

13 Slag and matte equipment. 0.4 Superstructure. 

14 Furnace No. 5, bustle pipe, . 5 Falsework. 

settler etc. 0.6 Plumbing. 

15 0.7 Wiring. 

16 0.8 Painting. 

17 

18 Connecting blast pipe. 

19 Blast pipe in smelter. 
Converter Plant: 

20 Building (including crane). 

21 Converter No. 1 (including stand and tilting system). 

22 Converter No. 2 (including stand and tilting system). 

23 Downtakes. 

24 Flue. 

25 Charge system. 

26 Copper disposal. 

27 Slag disposal. 

28 Blast pipe. 

29 Hydraulic system. 
Relining System: 

30 Building. 

31 Relining pit (including tamper and crane). 

32 Clay mills. 

33 Clay and quartz bins. 

34 Track and trestle to same. 

35 Tunnel. 

36 Drying stands. 

37 

38 ;... 

39 

Charging System: 

40 Tunnel. 

41 Trestle. 

42 Trackwork. 

43 Equipment, charge cars. 

44 

45 

46 

47 

48 

49 



MISCELLANEOUS COST REPORT BLANKS 



439 



Flue System: 

50 Dust chamber, steel work (including hoppers) 

51 

52 

53 

54 Tracks. 

55 New stack. 

56 Equipment, cars, etc. 

57 

58 

59 

Power Plant and Blast Mains: 

60 North addition (building). 

61 South addition (building). 

62 Receiver. 

63 Changes in present blowers and connections. 

64 Blower No. 4 and connections and motor. 

65 Blower No. 5 and connections and motor. 

66 Blowing engine. 

67 Blower No. 6, connection and motor. 

68 Blower No. 7, connection and motor. 

69 Generating set No. 2. 

70 Switch-board. 

71 

72 

73 

74 

75 

Sampling System: 

76 Temporary sampling room. 

77 

78 

79 

Track System: . 1 Grading. 

80 Standard gauge changes. 0.2 Track-laying. 

81 New standard gauge yard. 0.3 Ballasting. 

82 Slag tracks. . 4 Switching. 

83 Lime track. 

84 Track scales. 

85 

86 

87 

88 

89 

Shops: 

90 Machine-shop building and blacksmith shop. 

91 Machine-shop plant. 

92 Steel shop building. 



440 CONSTRUCTION COST KEEPING AND MANAGEMENT 

93 Compressor-motor and building. 

94 Boiler-shop and round-house building. 

95 Boiler-shop and round-house plant. 

96 Carpenter shop building. 

97 Carpenter shop plant. 

98 Electrical shop building. 

99 

Bins and Trestles: 

100 Main receiving bins. 

101 Trestle approach to same. 

102 

103 . . 

104 

105 

106 

107 

108 . 

109 

Miscellaneous: 

110 High-pressure pipe line. 

111 Cement sheds. 

112 Greek bunk house. 

113 Drain tunnel. 

114 Smelter stable. 

115 

116 

117 

118 

119 

Standard Gauge Equipment: 

120 Oil tank. 

121 Locomotives. 

122 Wrecking crane. 

123 Cars. 

124 

125 

126 

In regard to this list, it may be stated that it is faulty in its 
arrangement, due to the full plans for construction not being 
complete at the time the work was started. The writer believes 
in a more complete segregation of fixed and movable plant, for 
insurance and appraisal purposes, as a machine can be moved to 
a new site, while its foundation can not, and the superstructure 
of a building is subject to destruction and damage by fire, while 
its foundation is not. 

In the matter of construction reports; The forms of two re- 



MISCELLANEOUS COST REPORT BLANKS 



441 



ports used for cost keeping from day to day are given in Figs. 
204 and 205. That shown by Fig. 204 was made out daily bjr the 
foreman for each kind of work done under his supervision, a 
separate report being made out for each segregation. At the 
end of the week the form shown by Fig. 205 was made out by 
the cost clerk from the data on Fig. 204, and the measurement 
or estimate of each piece of work performed. The form shown 





AW 
D 

S 

D 


ERICAN SMELT 
CHlHUA 

aily report of la 
for_. 


ING & REFINING CO, 

HUA PLANT 








NO. 


EMPLOYEES 


NO.HRS. 


RATE 


AMOUNT 




Foreman 










Carpenters 










'• 










Helpers 










Mechanics 










" 










'• 










Helpers 










Stone Masons 










Brlok " 








Helpers 




| 




Engineers 








Firemen 




1 




Plumbers 










Helpers 








I Llectriuians 










Laborers 










• 










Water boju 


















1 








1 










FOREMAN 



Standard size, 7 by 354 ">• 

Fig. 204. — Foreman's daily report. 





AM 
C 

S 

E 


ERICAN SMELT 
CHlHUA 

ost report for 

on 


ING & REFINING CO. 

HUA PLANT 









OATE 


ACCOUNT 


UNITS 


RATE 


AMOUNT 




Labor 










do 










do 










do 






1 




do 










do 








_ | do 










Brick 










Stone 










Sand 










Lime 










Cement 










Lumber 








































































1 






1 




CoBt per unit | 


1 


- 



Standard size. 7 by 3% in 

Fig. 205. — Cost clerk's weekly report. 



by Fig. 204 was also used by the timekeeper as a check on his 
time, as the total number of man-hours or man-days should agree 
in both cases, and also the total in dollars and cents for the pay 
period. 

As there is likely to be inaccuracy in progress measurements 
which are taken daily, or even weekly, it is well to combine the 
reports of several weeks. These inaccuracies will then disap- 
pear, and a truer calculation of unit cost may be made. 



442 CONSTRUCTION COST KEEPING AND MANAGEMENT 

This system had to be varied for the different conditions 
under which the construction work was conducted, for example, 
in Mexico, where the foremen were mostly illiterate; special men 
were employed for the cost keeping, and the forms differed 
slightly from those used in places and on classes of work where 
men of better mental capacity were employed. 

Bills for materials of construction were distributed by the 
superintendent or cost clerk at the time of checking to the ac- 
counts where they belonged. When bills could not be charged to 
their regular jobs, on account of the actual quantity of material 
going to each job being unknown, the total was charged to ware- 
house, and the different jobs debited and warehouse credited as 
the material was issued. 

It may be added that the engineer generally works under 
difficulties in keeping accurate cost records, as the general idea 
among American employers is that such data are useless expense, 
and they will not allow the necessary clerical force to make them 
accurate and useful. The sentiment among most of them was 
expressed in the late T. S. Austin's remark to the writer that 
whether the brickwork costs $12 or $30 per 1,000, the work would 
go on until it was completed or the company "went broke." 

EmileLow, M. Am. Soc. C. E. (by letter). — On construction work 
it is always interesting for the engineer-in-charge to know, at 
least approximately, what the work is costing the contractor. 
For want of absolute knowledge of the cost of some items, it 
may be difficult to ascertain the total cost, but even a knowledge 
of the cost of some of the items, as before stated, is of some 
satisfaction. 

It may be stated with some assurance that, during construc- 
tion, nearly every railroad company keeps some kind of a force 
account, which is rendered to the chief engineer, generally weekly, 
by his subordinates. 

Some years ago, while the writer was in charge of some heavy 
railroad construction in Southwestern Virginia, he originated 
and put into effect a system of cost keeping, which showed 
monthly the cost to the contractor of various classes of work, 
the statements of which were submitted with the monthly 
estimates. 

The system was extremely simple, and consisted .essentially 
of three blank forms which constituted the basis for keeping the 
records. 



MISCELLANEOUS COST REPORT BLANKS 



443 



On the railroad in question, each residency consisted of from 
seven to ten 1-mile sections, thus each residency ranged from 
7 to 10 miles in length. The contractor's forces were counted 
daily by a timekeeper employed by the railroad company, which 
work comprised his whole duty. 

A special timebook was prepared, a double page of which is 
shown by Fig. 206. 



NORFOLK & WESTERN 


R R 


CO 


DIV 


s:on 


































DAILY STATEMENT OF. FORCE" EMPLOYED BY 




DESIGNATION OF LABOR A 


sd materials: j 




RACTORS 
EMAN ' 


DATE 


1 


2 


3 


i 


6 


ti 


1 


8 


9 


10 


on _ ._ __ station 

Section no. 

FOR 




OESIPNATION OF LASOR AND MATERIAL; 


DATE 


I 


2 


3 


1 


5 


c 


7 


S 


9 


JO 


S 
























M 
























T 
























w 
























T 
























F 
























F 
























S 
























E 


























TOTAL 
























TOTAL 






















S 
























S 






















M 
























M 
























T 
























T 
























W 
























V.' 
























T 
























T 
























F- 
























F. 
























S 
























E 


























TOTAL 
























TOTAL 






















s.-. 


























SUMMARY 


M 
























OF 
LABOR 

MATERIAL 


FO 


R WEEK AND PARTIAL WEEK 


t- 
l- 


i 


AMOUNT 


T 


























END 


no: 






w 
























T 
























F 
























1 






















5 
























2 
























TOTAL 






















3 






















S 
























4 






















M 
























6 






















T 
























6 






















W 
























7 






















T 
























3 






















F 
























3 






















s 






















10 
























TOTAL 


















1 


TOTAL 



























Standard size. 7 by IH in.. 

Fig. 206. — Record of labor and materials, railroad construction. 



From an inspection of the timebook it will be noted that it is 
arranged to keep a separate record of each and every piece of 
work, no matter what it may be. It is also arranged to show the 
totals for each full week as well as for the partial week. Occa- 
sionally, there is a month which includes 4 full weeks and parts 
of 2 weeks, making space for six entries necessary. 

The usual practice is to send in the force accounts weekly to 
headquarters, and the arrangement of the book facilitates this. 
At the end of the month there is a summary from which the cost 
of the work is obtained. 



444 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Of course, owing to the method used, the cost obtained is 
not absolute, as the force employed during the morning and after- 
noon may vary in numbers, the timekeeper passing over the work 



1 


RE 
SE 

MC 


.RAILROAD CO.. 














COMPARATIVE STATEMENT 
ESTIMATE VS. EXPENSES estimate no 






















CLASS OF 
LABOR 


RATE 


SEC. 


SEC. 


SEC. 


SEC. 




NO. 


AMOUNT 


NO. 


AMOUNT 


NO. 


. AMOUNT 


NO. 


AMOUNT 


o 

< 


Foremen 




























laborers 




























Teams 






















































Total Labor 




























Estimate 




























Difl ere nee 




























z 

o 
o 


Foremen 




























laborers 






L_ 




















Teams 
























































Total Labor 




























Estimate 




























Difference 


























o 

5 
< 

cc 
CD 


Foremen 






1 




















Laborers 




























Team a 




























Blacksmiths 




























Carpenters 










































































































































Total Labor 
























































Superintendence 




























Explosives 




























Total Expense 




























Estimate 




























Difference 




























>- 
cr 

■z. 
O 

< 

2 


Foremen 




























Stone Cutters 




























Masons 




























Laborers 




























Teams 
















































































































Total Labor 














































































































Estimate 




























Difference 

































Standard size, 8^ by 10JJ in. 
Fig. 207. — Monthly summary, railroad construction. 

only once a day. Where absolute accuracy is required, more 
timekeepers would have to be employed. 

As there are no printed headings, the spaces may be filled in 
as the nature of the work requires. Space is provided for ten 



MISCELLANEOUS COST REPORT BLANKS 445 

different designations of labor and material, and in cases where 
there are more items, other pages can be used. It will be seen 
that the timebook is very flexible, and can be adapted to any 
contingency. 

At the end of the month all work is classified, the form, Fig. 
207, being used. The sample sheet shows columns for clearing, 
grubbing, grading, and masonry. This column is left blank, and 
the various classes of work are written in, using as many sheets 
as necessary. 

Before the final classification, by sections, the location ofeach 
individual piece of work is entered in the column having the 
printed heading, "Sec." On the grading there may be as many 
as ten or more forces at work on a mile section; several culverts, 
bridge abutments, and piers may also be building. 

The blank form, Fig. 207, may be used in making a compila- 
tion showing the cost for separate localities, or the totals for any 
one section may be entered, these totals being obtained by the 
addition of the various separate items. 

Figure 208 is a blank form showing the summary of all the 
work on a contract. 

The main idea underlying the whole scheme is to make a 
monthly comparison with the engineer's estimate. 

Referring to the timebook, Fig. 206, there is on a page the 
cost to the contractor of a particular piece of work, during the 
month, say a bridge abutment. An estimate of quantities and 
cost has been made by the engineer in charge of this particular 
work. 

The details of the cost to the contractor are transferred to 
the blank form, Fig. 207, the amounts being shown under the 
heading marked "Sec," the "estimate" placed under the total, 
and the difference obtained, which will be more or less as the case 
may be. These statements then show in detail the expense and 
estimate of each particular piece of work. 

Then a summary is made of each and every kind of work by 
sections (1 mile), and also a summary of the various estimates. 
These summaries then show, mile by mile, the status of the 
various kinds of work. 

The engineer's estimate always shows the total cost of a sec- 
tion, and in order to make a proper comparison of all expense, 
another blank form is needed, which shows a summary of all the 
labor, superintendence, explosives, stone, sand, cement, timber, 



446 CONSTRUCTION COST KEEPING AND MANAGEMENT 



iron, bolts, etc., this being the total cost of all the work in a 
section. 

These totals, shown by Fig. 209, may be readily obtained 
by using the form shown by Fig. 208, for the purpose of tabula- 















z 
C 

c 

Z 
< 
Q. 

s 
o 
o 


L 

o 

t- 
< 

1- 

z 
o 
o 


§*< 










$« 


■ 










O 2 

5 H 










1- X 


— 


— 


..RAILROAI 

VISION 

STATEME 
. EXPENSE 

INCL 


III 












COMPARATIVE 
ESTIMATE VS 
;cs. NOS. TO 


III 










> 

O 










k z 

a- i 
o £ 






•• 

a 




_ 


a 






or 

o 

3 










o * 
3 o 
9 






s 


C 

i 




o 
P 
o 

<s 



















" 1 1 
lis 
£ I 3 



Fig. 208. — Monthly summary 
of actual and estimated costs, by 
sections. 



FORM No. C.E ^ 

CONSTRUCTION DEPARTMENT. 



RAILROAD COMPANY. 



COMPARATIVE STATEMENT. 

ESTIMATE vs. EXPENSES. 



INCL. 



-TO INCL. 



ESTIMATE NO.. 



Labor 

Superintendence 

Explosives 

Stone. Sand, Cement. 
Trmber.lron, Bolts __. 

Total Expenses 

Gross Estimate 

Apparent.* 



-"- t" 



GAIN OR LOSS 



Total Expense -- 

Net Estimate 

A p parent 



J_ 



EXTRA WORK 



Amount plus 15 Per Cent.. 

Force Account 

15 Per Cent 



Certified By 



DIVISION ENGINEER 



Fig. 209. — Monthly summary of actual 
cost and estimated costs, entire contract. 



tion, as the main items are all placed in separate columns, and 
can be easily added. In some quarters objection is made to keep- 
ing an accurate account of the forces employed by the contractor 
and the tabulated cost, the main reason assigned being that the 



MISCELLANEOUS COST REPORT BLANKS 447 

engineer's estimate is influenced thereby to some extent. This 
need not be, as the cost to the contractor is not generally known 
until some time after the estimate is made out. In most public 
works nowadays there is no classification of excavation, so there 
are no grounds whatever for manipulation, although there might 
be under the classification method of dividing excavation into 
earth, hardpan, and loose and solid rock. 

Again, the contractor's cost may be tabulated wholly in the 
division engineer's office, or even in the office of the chief en- 
gineer, he being furnished with duplicate copies of the timebooks, 
which, as before stated, form the basis of the whole system 
described. 

The writer is a firm believer in keeping costs of contractor's 
operations, for the very important reason (and almost the only 
one) that it affords some tangible evidence of fixing suitable 
unit prices on future work, instead of using that very undesirable 
makeshift, guessing at them. 

F. H. Newell, M. Am. Soc. C. E. (by letter) .—The following 
comments, prepared by V. C. Croissant, are offered with the 
hope that they may be of value. 

A careful reading of Mr. Falk's paper leads to the conclusion 
that the system described is for use on work which is highly 
centralized. The contracts are evidently for compact pieces of 
work in a city. The opening paragraphs state very clearly the 
real value of cost-keeping data in the great majority of construc- 
tion operations, and are especially pertinent to those for which 
this system is applicable. The method described would result 
in accurate data covering prime costs of any class of work in 
which labor was the principal cost element. 

It should be noted that there are two sources of error in cost 
accounting which seem to be almost impossible of complete elimi- 
nation. With the presence of possible errors due to either or 
both of these causes, the results are practically valueless to any 
contractor except (as stated by Mr. Falk) the person actually 
preparing the data. Even he may be so deceived by his own 
calculations as to find the bankruptcy courts eventually his only 
relief. These sources of error are : 

1. The substitution of estimates for certainties, in the case of 
the engineer or proprietor who is so thoroughly impressed with 
the value of direct and prompt information that he uses assump- 
tions (in many cases purely guesses) for actual mathematical facts 



448 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Such a man gathers daily all the data possible, and, because of a 
lack of system or of a comprehensive plan, fails to consider many 
items, such as unpaid purchases, unpaid labor, depreciation on 
plant, interest on investment, the value of his own time, and sup- 
plies consumed which are not measureable in the completed units 
of work, but which, nevertheless, are fundamental and positive 
cost elements. His main ambition is to "know from day to day 
how things are going." To do this, he arrives at theoretical re- 
sults by a series of allowances, the component elements of which 
are not certainly known. He may guess at them, or he may omit 
them entirely. His hypothesis may be satisfactory where the 
work to be done is small, and highly centralized, and when the 
engineer making the estimates is of large experience and excellent 
judgment. 

2. The delay for accuracy which occurs with the book keeper 
or cost-keeper who is professionally proud of his work, and so 
short-sighted as to make absolute accuracy his main concern. 
Such a man insists on the results being unassailable from any 
and every angle; the figures must "balance," or "square into" 
everything that bears on the accounting of the firm. This 
makes for accuracy — eventually — but the results are largely 
historical, and, after being neatly typewritten and "tied into "all 
related statements, are allowed to see the light of day long after 
the evils which they might have corrected are forgotten by the 
"man on the job." They are simply the autopsy of a dead trans- 
action, not a diagnosis of the progress of a vital case. 

The plan presented by Mr. Falk is one which requires a 
single book, namely, the cashbook. It would appear that all lia- 
bilities must be paid immediately; and that everything purchased 
in the way of supplies must go into the work immediately. If 
such is not the case, then future liabilities will not reach the cost 
acounts untilt he supplies represented are paid for. If supplies 
are purchased against a future need, they will be charged in the 
month paid rather than in the month used. 

A cashbook, of course, cannot be used to record estimated 
depreciation on equipment used from month to month. If the 
work is done largely by expensive equipment, this important ele- 
ment of cost, depreciation, is overlooked. Interest upon ivest- 
ment would be entered from time to time if money was borrowed 
and interest paid at the bank. If the capital is actually paid in 
by the proprietors, and, consequently, no regular interest pay- 



MISCELLANEOUS COST REPORT BLANKS 449 

ment is made, then the cashbook would not record the legitimate 
earning on this capital to which it would be entitled. The old 
accounting question of whether bookkeeping should deal with 
cash receipts and disbursements, or whether it should deal with 
the question of values received and expended, whether paid for 
or not, is the one which really comes to the front. It was settled 
long ago in favor of the latter method. 

For a small business, the cashbook may be the only record 
necessary, but for operations which are extensive, it is, perhaps, 
the smallest part of the necessary bookkeeping records. The 
same rule may be laid down to decide whether or not cost keeping 
shall become a part of bookkeeping. In small operations, it 
is quite possible to arrive at very accurate costs by a system of 
card records entirely independent of bookkeeping, but, for large 
works, the elements of cost are so numerous that a well-defined 
automatic system, governed or controlled by analytical account- 
ing method, must be adopted in order ot insure complete records. 

In the United States Reclamation Service a system has been 
adopted in which an attempt has been made to harmonize the 
views and serve the purpose of both the engineer and the account- 
ant. In all Government work it is necessary, in addition to hav- 
ing the available results for the immediate use of engineers, 
foremen, etc., to make a permanent record of costs, since that 
work is subject to investigation by commisions, and by the public; 
and the expense of construction must be brought within a specific 
appropriation or allotment of funds, which corresponds to a 
commercial contractor's bid price for a given undertaking. 

The system adopted by the Reclamation Service has been 
devised in order to place in the hands of the man locally concerned 
a complete record, which is available for his inspection from day 
to day, and shows the prime cost of all work. This prime cost 
takes up the charges for all labor, material, and supplies used; 
these records are entered daily, and, by the use of the adding ma- 
chine, totals under any classification of expense, or for all classifi- 
cations under any feature, can be known in a few hours. After 
the local cost-keepers have finished this tabulation the results go 
to the bookkeepers, who add the top extrinsic costs, such as ad- 
ministration, depreciation, and all the other expenses, which are 
unknown to the timekeepers and storehouse clerks. These are 
finally assembled in the project offices, and monthly statements 
for each feature are transmitted to the general office in Washing- 

29 



450 CONSTRUCTION COST KEEPING AND MANAGEMENT 

ton. When any large, or important feature is finally completed, 
the project engineer prepares from these local records a cost 
report showing the cost by units of work done, which is analyzed 
into all the elements of labor, material, supplies, power, deprecia- 
tion, superintendence, general expense, etc. 

By the method used in the Reclamation Service, the princi- 
pal machinery for assembling costs is: 

1. An Account Number Book. — Each feature or job of work 
is assigned a set of numbers, as many being reserved as will be 
necessary to give each classification of expense a number. The 
following is an example: 

Dam for reservoir. 

260 Superintendence and engineering. 

261 Labor, foremen. 

262 Labor, masons. 

263 Labor, cranemen. 

264 Labor, teamsters. 

265 Labor, timekeepers and clerical. 

266 Labor, laborers. 

267 Labor, animals owned and hired. 

268 Labor, blacksmiths. 

269 Labor, drillermen and machinists. 

270 Supplies, cement. 

271 Supplies, powder, dynamite, fuse, etc. 

272 Supplies, drill steel. 

273 Supplies, lumber. 

274 Supplies, power. 

275 Supplies, miscellaneous supplies. 

276 Supplies, labor and repairs. 

277 Employers' liability. 

278 Depreciation on equipment. 

279 General expenses. 

2. Timebooks. — These books are ruled so that the time of 
each employee may be shown for each class of work performed. 
When the timekeeper takes time, he makes the proper notation, 
indicating the hours worked and the class of work. Figure 210 is 
an illustration of a timebook adapted for this purpose. 

3. Requisitions. — All supplies, materials, etc., ars ued issfrom 
storehouses at cost plus freight and. a percentage addition to 
cover handling and storehouses expense. For this purpose a 
requisition blank, Fig. 211 is used. Each foreman is supplied 
with a list of account numbers which are allotted to the features 
of work in his immediate charge. When he makes up a requisi- 



MISCELLANEOUS COST REPORT BLANKS 



451 



7- 096 

SHEETNO TIME BOOK . 19 

(Month) (Featuie) 0-1191 














in 

CM 












CM 












CO 
CM 












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CM 












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o 

CM 












at 












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Time and rate of pay correct 1 

(Signed). _ , 

6-1191 (Engineer) 


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JIM.. 



S £> 



452 CONSTRUCTION COST KEEPING AND MANAGEMENT 



tion, he indicates, opposite each article ordered the classification 
to be charged, by inserting the account number assigned to that 



DEPARTMENT OF THE INTERIOR 

U. S. RECLAMATION SERVICE 

PROJECT 


REQUISITION 

No 

19 


To STOREHOUSE CLERK: 






feature: 


ACCOUNT 
NO. 


QUANTITY 


. ARTICLES 


UNIT 

PRICE 


TOTAL 


WANTED 


FURNISHED 








































Original (on white paper) goes to cost keeper 
















for entry in classification book 














Duplicc 


ite (on pink) remains with storehouse 
















clerk for his protection 














Triplic 


ate (on yellow) is returned to foreman 














as an 


advice of cost of goods furnished 


















































































































































































































Deliver 


to _ . - 




For for 


wardim 


j by 






Wagon Bill of 


Lading- > 


ro __ _ 
















Received the a 


rticles above listed as furnished 
(Signed). _ 















Standard size t>% by 1% in. 

Fig. 211. — Requisition blank, U. S. Reclamation Service. 

classification. The storekeeper enters on the requisition the unit 
price and total value of supplies issued. 



MISCELLANEOUS COST REPORT BLANKS 453 

4. General Classification Book. — The book, Fig. 212, is used 
to assemble the items of expense under each classification. 
Each folio is ruled with ten columns, and the columns are num- 
bered from to 9. The first folio is not numbered, and the col- 
umns to 9 will represent the classification indicated; the second 
folio is numbered 1 . Reading the column numbers as the units 
with the folio number as the tens, the columns on folio No.l will 
assemble the charges against classifications Nos. 10 to 19. Any 
number of account numbers can be added by inserting additional 
folios, as this is a loose-leaf book. There are 31 horizontal 
lines — one for each day of the month — and a few additional 
for special entries at the end of the month, as depreciation, 
interest, etc. 

The amount of charges appearing on requisition is entered 
daily in the respective columns, and the earnings of employees, 
as shown by timebooks, may be thus noted. The foreman or 
engineer wishing to know the cost of work of any particular fea- 
ture at any time has only to ask the cost keeper to add up the 
columns representing the classifications assigned to that feature, 
and he will have the total cost for labor and supplies expended to 
that date. 

At the end of the month these sheets are removed from the 
binder and sent to the bookkeepers, who add the top costs and 
post the total for the month to the cost ledger which contains 
all charges for previous months, thus making a final completed 
record. 

With the detailed analysis, as accumulated in this manner, the 
engineer can make a complete statement in minute detail or, 
if he prefers, in general terms, by combining several analogous 
classifications. 

There are many other accounting phases which the writer 
has not mentioned herein, as the purpose is to treat of a method 
of cost keeping. Any accountant can fit the general plan above 
described into a well-organized bookkeeping system. 

George Hill, M. Am. Soc. C. E. (by letter). — Every member 
of the society who presents a workable solution of a problem, 
and especially one of such importance, is entitled to the thanks 
of the members for so doing, and therefore the writer feels that 
on so important a matter as cost keeping Messrs. Falk, Hammatt, 
and Low have done well to contribute of their experience. 

The attempt has frequently been made to solve the problem in 



454 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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MISCELLANEOUS COST REPORT BLANKS 455 

some conventional or semi-conventional manner, usually without 
success, for the reasons that there existed : 

(a) A lack of appreciation of the requirement for simplicity; 

(6) A lack of appreciation of the fact that the information 
required is a combination of figures and the combinations are 
constantly changing; 

(c) The general belief that cost keeping is something different 
from bookkeeping, instead of being intelligent bookkeeping. 

If the accounts of any piece of work can be kept so as to meet, 
on the one hand, all the requirements of bookkeeping, and, on the 
other hand, all the requirements of cost keeping, the problem is in 
the way of being solved. 

The real and only purpose of bookkeeping is to show the receipt 
and disbursal of money in an accurate manner. If this is per- 
formed so that, with a minimum of clerical work, clerical and 
arithmetical errors can be readily detected and eliminated, it is 
good bookkeeping. 

When the next step is taken, and the memoranda of disbursal 
show for what the disbursal was made, this is beginning cost 
keeping. 

If this is done in sufficient detail and in such a manner that 
the summations of two or more groups can be readily combined, 
the problem of cost keeping is solved. 

If vouchers, checks, and bills are arranged so that they can 
be readily examined and compared with the entries, this provides 
for an accurate and inexpensive audit, and meets completely all 
the proper requirements of bookkeeping, cost keeping and audit- 
ing. The writer would emphasize the word "proper;" there are 
in use systems which are very complete but are so burdensome 
that the facts cannot be recorded and transcribed until long after 
their usefulness has vanished, and they are so full of detail as to 
blind the mind completely to their true significance. Knowledge 
of costs should be a weekly matter, and action should follow 
promptly. 

It is a good thing to know that concrete 5 in. thick, placed 
in forms, cost on a certain job an average of 20 cts. per square 
foot, but it is more important to know that Brown's gang laid it 
for 18 cts., while, with Smith's gang, it cost 22 cts., under the 
same circumstances. 

While it is possible to predetermine the general lines along* 
which costs will be required, two-thirds of the questions asked 



456 CONSTRUCTION COST KEEPING AND MANAGEMENT 

in regard to costs will call for summations of items other than 
those originally contemplated, and the same question will rarely 
be asked twice; consequently, the problem which the writer has 
attempted to solve is not a simple one. He has been engaged for 
many years in executing work on a fixed profit basis, and has had 
experience with the accounting systems of a wide range of clients, 
and, as a consequence thereof, has been compelled to devise a 
system of his own. Practical experience with this system has 
demonstrated its applicability over a wide range of subjects in a 
satisfactory manner. It is hoped that a description of it will be 
of interest to the society. 

Although the system presents a method of keeping the exact 
cost of a piece of work, and is therefore in the nature of book- 
keeping, it is not bookkeeping in the conventional sense, but an 
orderly arrangement of memoranda which are kept so that any 
cost question which may be asked during the progress of the 
work, either of a detail or of the entire work, can be answered, 
either immediately or in a few minutes. The memoranda are 
kept so that, if there are a variety of jobs in the office, each one 
is separate and distinct in its entirety; finally, thejr are kept 
so that, as soon as a piece of work is completed, all memoranda 
in regard to it are immediately filed away and prevented from 
interfering with other work in the office. 

The writer will describe the system as applied to building 
operations on a fixed profit basis, as in this way the principles 
involved will be understood, and concrete examples may be 
more easily obtained. 

1. Each piece of work is given a designating job number, 
and the estimate of original cost is entered in a monthly statement 
in a column headed "Original Allowance." In making up the 
estimate, the details of work, comprised under each account sub- 
division or number, are worked out in full, so that the cubic yards 
of excavation, and the incidental expenses thereof, are clearly 
stated. 

In a column headed "Structural Steel," the number of tons 
of each of the various classes of steel, cast iron and other work, 
the price for the fabricated material, and the erection costs are 
stated, and so on down the list. 

The sum of the statements in the column headed "Original 
Allowance" gives the total cost of the work, and these items are 
carried along in the monthly statements, 



MISCELLANEOUS COST REPORT BLANKS 457 

Any changes involving cost alteration are entered in a column 
headed "Additions." These additions appear in this column 
only for the month to which they refer, and in the following 
month are transferred to the "Original Allowance" column, 
leaving the "Additions" column free for the current month's 
changes. 

The column headed "Payments" contains the summary of 
the disbursements under the various accounts to the date of the 
statement, and shows the total cost of the work to date. The 
sum of the payments plus the balance on hand in the bank (which 
is stated on blank lines at the bottom of the sheet) must equal the 
sum of money advanced or set aside for the conduct of the work. 

All obligations incurred, either in the nature of sub-contracts, 
contracts for materials, and the like, are entered under the head- 
ing, "Contracts Made;" the column headed "To Complete" is 
only used occasionally, usually as the work approaches comple- 
tion, for the guidance of officers or others who are not sufficiently 
familiar with all the details of the work to be able to supply the 
figures without assistance. It is rarely used more than three 
or four times on a job, but by being inserted in the monthly 
statement makes an additional form unnecessary. 

2. The time is kept in duplicate by using one or more time 
sheets as may be necessary, and making a carbon copy. The 
sheets are made up in pads, kept in an enameled leather case, and 
each week the originals are sent to the office. 

The columns, "Total Hours," and "Amount," are usually 
filled in by the superintendent and checked at the office. 

The pay roll for each account number, as given in the monthly 
statement, is kept so that one man's name may occur several 
times on the pay roll. The only disadvantage connected with 
this is that sometimes two pay envelopes are made out in the 
same name, the. sum of the two being the correct amount earned. 

In the writer's work, weekly pay rolls amounting to $1,500 
require 2 hr. time to check, draw the money, place it in the 
envelopes, and prove the accuracy of the distribution. 

3. Materials in general are provided for either in connection 
with sub-contracts or by agreement with supply houses. If de- 
livery is to be made complete at one time, and the time is de- 
termined, one of the orders is issued; but if delivery is to be made 
piecemeal, or at different times, two or more orders are issued, 
and these are subdivided so as to secure each delivery at the 



458 CONSTRUCTION COST KEEPING AND MANAGEMENT 

time when it will be needed. The order is made out in quadrupli- 
cate, the order blanks being made up in pads and in sets of four, 
so that, by the use of carbons, one writing suffices for the four. 

The first or white copy is to be retained by the party receiv- 
ing the order, and on the back of this the conditions of the order 
are printed. 

The second, or pink copy, is a delivery receipt. It is sent 
with the order when delivery is made, is signed by the job super- 
intendent, and, when the bill is rendered, is attached to the bill 
and affords a means of checking it. 1 

The third, or blue copy, is sent to the job superintendent as 
a notice to him that the order has been placed. As soon as the 
order is delivered, he signs the blue copy and returns it to the 
main office, where it is filed temporarily and is an evidence of a 
debt which should be paid on the first of the following month. 

The fourth, or yellow copy, is retained in the office for pur- 
poses of comparison with the other copies and as an evidence of 
an outstanding obligation. 

This procedure is followed in all cases except for bricks, 
sand, broken stone, cement, and loads of rubbish, in which cases 
slips printed on stiff paper are issued, and are dated with an in- 
delible pencil by the superintendent when issued. These slips 
are returned with the bill, and, after the bill is checked and 
audited, are destroyed. 

The blue and yellow order slips are kept in the same file, and 
are usually arranged in groups, so as to be readily reached. 
When the pink order slip comes with the bill, the blue and the 
yellow copies which correspond are removed from the file and, 
after comparison, are crossed off, then the three slips are placed 
in a file for paid orders. 

The order numbers are endorsed on the bill and, if necessary, 
are grouped under the account numbers so that -the bill is sepa- 
rated into its component accounts. 

4. Small sub-contracts are treated the same as orders. 

5. In reference to payments, each job executed is conducted 
as an independent piece of work, the agreement with the owner 
providing that, from time to time, he shall furnish the funds 
necessary to conduct the work. The funds are. deposited in the 
bank to a separate account. This is done because the only effec- 
tive control that can be exerted on work is the control of the 
purse strings; that certifying to the owner that payments are due 



MISCELLANEOUS COST REPORT BLANKS 459 

is very far from being the equivalent of a payment, and, finally, 
that where the builder's own capital is used for the conduct of 
the work, a charge would necessarily have to be made for such 
use, which would result in an increase in the cost. 

The bank check used for this purpose is twice the width of 
an ordinary check. It is filled out so that the charge against the 
proper account number will appear on the face. The checks 
are carboned when written, so that an exact copy remains in the 
office. The check when issued is folded longitudinally, is en- 
dorsed in the customary way, passes through the bank as an or- 
dinary check, and, although several thousand have been used 
with different banks, has met with no objection. 

The check form is a typical pay-roll check. When a payment 
is made, the check number is endorsed on the bill or voucher, and 
the bill or voucher is filed in a Shipman file in numerical order., 

6. In keeping the records, the writer uses a 9 by 13^-in. 
Shipman Common Sense Binder; heavy manilla sheets, with 
canvas tags bearing the account numbers, are used to separate 
the accounts, and regularly ruled ledger sheets are interposed be- 
tween them for each account, as many sheets being used as are 
necessary. Additional sub-divisions are provided for recording 
the checks issued, called the "Cash Account," and for binding in 
the monthly statements. In small jobs, provision is made for 
binding in all contracts, sub-contracts, and additional orders 
received from the owner. On large jobs a separate binder is 
used. 

The cash account sheets are regular ledger sheets, one-quar- 
ter of the upper left side of the page used for the entry of money 
received. The remainder of the left side of the page is used 
for entering the checks, with date, number, name of account, 
and amount. The right side of the page is used for keeping a 
running balance. This serves two purposes, the balance on 
hand is always immediately evident, and the sum of the checks 
to date, obtained at the end of each month, must show a balance 
equal to that obtained by the partial steps, thereby proving the 
arithmetical operations. Each check is entered in detail in the 
detailed accounts, the first page usually being devoted to labor, 
and the succeeding pages to materials and small contracts. En- 
tries are made in the detailed accounts showing obligations in- 
curred, where contracts are made for specific amounts, and these 
are entered on the left half of the page. Where checks are drawn 



460 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to pay the bills, the entry on the left half refers to the bill, and the 
payment is entered by date and check number. 

The sum of all the entries on the right side of all the pages 
must equal the total payments to date. These summations are 
usually made lightly with a soft pencil at the foot of the page, and 
are carried ahead for each account, so that the last page of the 
account shows the total amount paid thereon. The monthly 
summaries of the larger divisions of each account are made in 
ink, so that a simple subtraction or the addition of three or four 
sets of figures will always give the month's business, for that 
particular item. The bank book is written up each month, and, 
as no payments are made except by check, the bank balance 
should correspond with the balance shown in the accounts, 
which, through the bank, proves the accuracy of the total pay- 
, ments made, and this gives an amount which should be the total 
of all the detailed accounts. Comparing month by month, as 
given in the monthly statement, the progress of the work is 
evident. 

The writer has made it a practice always to prepare his own 
pay-roll checks, and to visit the work at least weekly. Writing 
out the pay-roll checks serves to fix temporarily the cost of the 
preceding week's work in the mind, and if a man is experienced in 
doing work, he can tell at once whether or not for that week's 
work he has received proper value for the wages disbursed. In 
the writer's experience, that is the best time to correct a foreman 
or a superintendent, because there is then likely to be little dis- 
pute as to the facts. This prevents the continuance of errors of 
organization, and shows where the ax should fall. 

Generally, order slips and folded checks are of the same size, 
and all blanks are of conventional file size, so that anyone of the 
filing system cabinets may be used. The cost of the work may be 
determined within a small fraction of 1% at any time by an 
examination of the file. Each file is independent for each job, 
and can be taken away for study, or the entering can be inter- 
rupted at any point without difficulty. 

All receipts, cancelled checks, and paid bills are filed in a 
similar Shipman's file, so that on the completion of a job the en- 
tire records may be filed. The space required for a $250,000 
building operation is about 9 by 14 by 12 in. By the use of the 
forms in this particular way, duplicates are obtained of orders, 
checks, pay rolls, and monthly statements, carbons being an ex- 



MISCELLANEOUS COST REPORT BLANKS 



461 



tremely important factor in saving time. On a $250,000 job the 
average monthly cost for all entering, bookkeeping, checking of 
pay rolls, and the preparation of monthly statements was 16 
hr. at 35 cts., or $5.60. 





B 22 Hull Division, Navy Yard, Phila.,Pa. 




J. 0. 0225 


To ROUTE SHEET „„„ , e ^. 6 


Brief of Job 

40 TOE CRAKE - QUARTERLY INSPECTION. 


Plan No. 


VL/i-'O -16 






PS /D-/i-/i 




/6-e-it 


Approved Started 


Completed 








Superintendent 1 


Foreman 




Section 

No. 

and Shop 


SECTION 


Date to 
Complete 


Date to 
Start 


1-IL 


0225 

FALLS 


10- ro-/6 








Was outside surface of fall cleaned for 
examination? 










Were tiny wires in the strands broken? 










Was the l?y of the rope irregular? 










Does the fall show any signs of kinks? 










Does the fall show any indication of weakneee? 










Are the wires in the rope much worn? Or chafed? 










Vfas the splice at standing part of fall examined? 










In what condition found? 








2-PS 


0225 

BLOCKS 

Were upper and lower. blocks examined? 

In what condition found? 

Were straps and securing bolts of upper blocks 
examined? 

In what condition found? 

What is the condition of all sheavee? 

Was topping lift gear examined? 

In what condition found? 


to. It- It 








Was hoisting gear examined? 




Sheets, Sheet No. 






In what condition found? 







Fig. 213. — Quarterly inspection blank for 40-ton shipyard crane. 



As described in detail above, the system appears cumber- 
some; in practical working, it is simplicity itself, as is evident 
bv the time and cost of keeping it up. 



462 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Route Sheet as Inspection Report. — In the September, 1917 
issue of Industrial Management the forms, Fig. 213 and Fig. 214 
were taken from an article by Wm. M. Kennedy. 

Similar forms may be advantageously used by a contractor 





6 22 Hull Division, Navy Yard, Phila.,Pa. 




J. 0. 0225 


To ROUTE SHEET Date 


Brief, of Job 


Plan No 








tO-B- '(> 


Approved 


Started 


Completed 








Superintendent 




Foreman 




Section 
No. 

and Shop 


SECTION 


Date to 
Complete 


Date to 
Start 


PS 


Were all wheels and trucks examined? 


10 -/i -/6 








In what condition found? 










Was roller rack examined? 










In what condition found? 










Was king bolt examined? 










In what condition found? 










V/ere all pivots and pivot plates examined? 










In what condition found? 










Vi'ere hinge pins examined? 










In what condition found? 










KECK/tKlCAL 










Were all journals end fcoxes examined? 










In what condition found? 










V/ere all gears examines? 










In what condition found? 










V.'as topping lift and nut examined? 










In what condition found? 










Were all clutches and levers examined? 










In what condition found? 










NOTE: All route sheets .are to be returned 
on completion to PI. Em. Via.. Shop 
Supt. with M.R.Ss for work to be 
undertaken. 




Sheets, Sheet No. 



Fig. 214. — Inspection blank used at Philadelphia Navy Yard. 

operating any large piece of equipment, for instance as steam 
shovel or drag line, and thereby provide a means to check up the 
general condition of the machine before shipping it for work in 
a locality where repairs might be difficult or expensive. 



MISCELLANEOUS COST REPORT BLANKS 



463 



The questions applying to the machine considered may be 
typed in as shown in the illustration and by having each one 
answered by the inspector reasonable assurance, that the equip- 
ment is in practical working condition, may be expected. 

Loose-leaf Balance of Stores Sheet. — A loose-leaf balance of 
stores sheet is also described by Wm. M. Kenndey in Industrial 
Management September 1917. 

This form, Fig. 215, designed for use in a shipyard is used in 
connection with material bin tags. It acts as a double check on 













3ALANCE OF STORES SHEET 










..„ 









„„ 






•LAM 












o 


ORDERED 


received 


ISSUED 


BALANCE ON HANO 


APPLIED ON 


ORDERS 


AVAILABLE 
























....... 








































































































































































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2 
























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Fig. 215. — Loose leaf from balance of stores ledger. 



stores and with it the store clerk is enabled to determine in a 
moment the quantity of an item available and on hand. When 
material is ordered it is entered in the first column; when received 
it is added to the amounts in columns 2, 4 and 6; when reserved 
for work in course of manufacture, but not immediately required, 
it is added to column 5 and deducted from 6; when material 
reserved in column 5 is issued it is deducted from 5 and 4; 
material under 6 is available for use, not reserved or applied on 
orders. 



CHAPTER X 
SYSTEMS OF COST KEEPING 

Cost Accounting on Construction Work — Detailed Description 
of an Efficient System. — The following appeared in two sections 
in Engineering and Contracting, April 8th and 22nd, 1914. 

Contractors in general have made some advance in recent 
years as regards their methods of cost keeping and of analyzing 
cost data, but the systems used in most cases are not comprehen- 
sive enough, nor is enough attention given to them to render them 
of greatest value. We believe that contractors will adopt better 
cost keeping and cost analysis systems as soon as they are brought 
to a realization of the importance of this part of the work. It 
must be realized at the start that no comprehensive system will 
be effective unless the contractor is willing to follow it up closely 
and give it skilled supervision. Contractors should know what 
various parts of the work are costing in time to enable them to 
modify inefficient methods, and the system which merely gives 
the costs of various items of the completed work has little value. 
The following paper, by Leslie H. Allen of the Aberthaw Con- 
struction Co. of Boston, presented before the Boston Society of 
Civil Engineers, gives in detail the cost accounting system used 
by this company on construction work. We have largely 
re-arranged the data contained in the original paper, but shall 
publish it practically in full. 

General. — The problem of cost accounting on construction 
work is one that has not received the amount of attention and 
study that its importance, warrants. When we consider the 
vital importance to the contractor on construction work of a 
knowledge of the cost of his work, it is surprising to find that only 
a few contractors have succeeded in finding out in detail what 
the unit costs of their work are. Most of the big commercial 
enterprises make a point of figuring very carefully their cost 
of production, but building and engineering contractors seem 
content to go on in their old ways, with only a hazy idea how 
their work is coming out, and no definite knowledge as to the 

464 



SYSTEMS OF COST KEEPING 465 

amount of profit or loss made until the job is completely finished 
and paid for. I venture to assert that not more than 10% of the 
contractors in Boston doing work on a lump sum basis could 
tell within $1,000 what their profits or losses are on their unfin- 
ished contracts now in hand. 

It is not hard to find a reason for this state of affairs. The old- 
time superintendent of construction was usually a mechanic who 
by reason of special ability had risen to the command of men and 
become a superintendent. These men, of whom many are still 
with us (and doing excellent work), are men to whom figures and 
costs meant very little. They relied for success on their innate 
common sense and their ability to drive the men under them, 
and although they made mistakes, some of which would have 
been self-evident if they had studied costs carefully, yet they did 
excellent work and achieved results not to be despised even in 
these days of scientific management, cost accounting and complex 
organizations of one sort or another. Such men, however, 
took no interest in cost accounting, and if directed to furnish cost 
figures took very little care to see if they were made up rightly or 
not. 

Another reason is that there is often a lack of definite instruc- 
tion given from the office as to how costs are to be kept, and that 
no man who has studied the problem and knows definitely just 
what is wanted is in charge of the work and personally respon- 
sible for it. The timekeeper on a construction job is a very busy 
man. Often he has materials to order and check, and many other 
duties to perform, and has no time to think out the details of a 
cost accounting system for himself, and he contents himself with 
as little work in subdivision of pay rolls as his experience tells 
him will "get by." Then when his reports come in they are 
handled by clerks who do not understand them and who do not 
make any effort to correct them as they go through, and the cost 
accounting system becomes unreliable and one is told that "it is 
impossible to keep accurate costs on construction work." 

It is probably true that every contractor and builder has made 
some attempt to find out the unit costs of the work which he does. 
Some contractors have got a system that really gives them the 
information they need. Many firms have a cost keeping system 
which tells them approximately what their unit labor costs from 
week to week are, but takes no account of materials and gives 
them no idea as to how the whole job stands financially. Such 



466 CONSTRUCTION COST KEEPING AND MANAGEMENT 

men have no real idea as to whether their jobs are profitable or 
not until the bookkeeper's statement at the close of each job 
shows the actual profit or loss made. Many have tried to keep 
up a cost keeping system, but have thrown it up owing to its 
difficulties and inaccuracies, and rely simply on their book- 
keepers to tell them how much expense has been incurred on the 
job, while their eye tells them how much of the job is done. The 
Writer remembers in his earlier days being directed to visit half- 
completed jobs for which he had made the estimate and make a 
survey of same for comparison with the bookkeeper's statements, 
and this was the only way known by his firm at that time of 
comparing estimated costs with actual costs to see what profit or 
loss had been made, although at that time a system of reporting 
weekly costs was being used similar to that outlined above. 

With the change of the times and the change in contractors' 
methods, the attitude of the contractor to cost accounting sys- 
tems is changing, too. The old-time superintendent is giving 
place to the technical graduate who is a man with engineering 
training accustomed to view the situation from all sides and 
relying on actual cost figures rather than on his own judgment 
to tell whether his work is efficient. Modern competition is 
becoming so keen and work is taken on such a small margin of 
profit that it is of vital importance that every item of the work 
be kept down to its estimated cost, and cost keeping is fast 
becoming a necessity to all who wish to make a profit out of 
contracting on construction work. 

The purpose of any cost accounting system is threefold: 
First, to watch the job from week to week to see if the work is 
being carried out economically; second, to see whether the cost is 
above or below that of the original estimate ; and third, to furnish 
information for future use in estimating and in supervising work 
in progress. In other words, first, to determine the items of 
prime cost and the unit prices of these items; second, to discover 
what relation these bear to a predetermined selling price; third, 
to establish new selling prices for future work. The relative 
importance of these three items is in the order given. 

The problem before the contractor's accountant is an entirely 
different one from that of the bookkeeper or the factory cost 
keeper. A good deal of the dissatisfaction and incompleteness 
of many existing systems is because the problem has been 
approached from the financial point of view rather than the 



SYSTEMS OF COST KEEPING 467 

engineer's. I think it was Mr. R. T. Dana who was the first to 
insist that cost keeping was not a bookkeeper's job and could not 
be satisfactorily handled by the man who kept the firm's books. 
This is so. The bookkeeper's viewpoint is the financial one, and 
deals with totals and balances of cash. The cost accountant's 
viewpoint is an engineer's, and deals with unit costs and quanti- 
ties of materials. The two cannot be satisfactorily held by one 
man unless he has had a thorough training both in bookkeeping 
and engineering lines. Such a training is rare. The primary 
object of the cost keeper in a large factory or mill is to determine 
the selling cost of the articles, and therefore every item of expense 
burden incurred in carrying on the factory is prorated or appor- 
tioned to the cost of the articles produced for sale. The contrac- 
tor's selling cost is determined beforehand and he is faced with 
the problem of so splitting up his selling cost that he has a proper 
appropriation for each item of expense, the very reverse of the 
factory's accountant's problem. It is for this reason that I 
have placed prime cost first as being the most important, and 
selling cost last as of least importance. 

The estimate of cost on which a contract is taken is more like 
the budget appropriation of our government, which having a 
predetermined amount of money to spend proceeds to allot as 
much as is possible to each government department in proportion 
to its needs, the total of such appropriations being equal to the 
amount of the estimate of cost. 

The contractor's cost accounts, if they are to be of any use, 
must show not only the amount of money spent in the work, but 
the way in which it has been spent; and this can not be shown 
if items of general expense, such as plant, watchmen, etc., are all 
distributed among the items of excavation or concrete. The 
result may be financially accurate but uninforming to the con- 
tractor. For instance, on the cost accounts on the Panama 
Canal which appear in the Canal Record it will be noted that the 
cost of plant, track forms and general expense, etc., all are 
worked out in terms of per cubic yard of concrete. This is correct 
from the financial viewpoint, and the result shows the cost of 
the concrete to the government. But it does not tell an engineer 
whether the work is being done efficiently or not. He wants to 
know the cost of setting up and repairing the plant, the cost of 
handling the material, the detailed cost of form work, while 
general expense is meaningless to him unless he knows the 



468 CONSTRUCTION COST KEEPING AND MANAGEMENT 

details. When the cost of moving tracks, repairing plant, etc., 
is reported at so much per cubic yard as a subdivision of excavat- 
ing cost, the cost of the operation cannot be criticised. It is 
very necessary that this distinction be kept in mind and that 
costs should be worked out from an engineer's standpoint rather 
than from a bookkeeper's or an accountant's standpoint. The 
information turned out by the cost-accounting department 
should not only show results but should give information showing 
the reason why the results are so. 

In the writers' judgment, the cost accounting on construction 
work should be handled in connection with the estimating 
department rather than in connection with the bookkeeping 
department. The estimator should know best what information 
he requires from a job to check up the work he has estimated, 
and into what units the costs should be divided. He is then 
enabled to keep closely in touch with actual work in progress 
and to compare it with his estimate from time to time. 

The method usually employed by contractors in their cost 
accounting is to divide up the time spent on the job under 
certain fixed headings, such as excavation, brick work, mason 
work, concrete work, carpentry, and so on, and to make a report 
of the quantity of each kind of work executed, and to work out 
from same either daily or weekly the unit labor costs; at the close 
of the job, to work these up into totals and also to work up at 
this time the cost of all materials into units and combine them 
with the labor costs, giving the total cost of labor and material 
on each item of the work. This works well in some offices as far 
as it goes, and shows whether each week's work was efficient and 
economical. But if no account is kept of material until the job 
is closed, and no check is taken on quantities reported by the 
men on the job, and no comparison is made with the estimate, its 
value is not very great. In the system used by the Aberthaw 
Construction Co., we have added from time to time the following 
features which do not appear in most accounting systems. First, 
in addition to the weekly labor costs, the average labor cost on 
each item to date is figured. Second, a periodical check on the 
quantity report is made. Third, we use a standard mnemonic 
code revised to suit the requirements of each job. Fourth, an 
accounting of material is kept up from month to month. Fifth, 
an analysis of the estimate is made for comparison with the 
weekly costs. Sixth, a monthly balance is struck, showing 



SYSTEMS OF COST KEEPING 469 

profit or loss to date. Seventh, a "field sheet" is furnished to 
the timekeeper which enables him to keep track more regularly 
and systematically of the men at work. 

It is the purpose of this paper to describe the Aberthaw com- 
pany's system in detail, taking up in logical order the above 
points and matters incidental thereto. The present system was 
not invented in a day but has been a gradual development. The 
cost keeping system was installed early in the history of the 
company by Mr. Wason, the president of the company, who laid 
work out upon the usual lines adopted by other contractors as 
indicated above. The above additional features have been 
added since the beginning of 1910 in the order indicated above, 
and the complete system may be said to have been in working 
order for over 2 years, long enough for us properly to try it out 
and to know that it really gives us the information we need. In 
other words, the system I am about to describe is not the dream 
of a theorist, but something that is really practicable; that is 
not expensive in operation and that any contractor can use if he 
has but the patience to study his problem and insist on getting 
just the results he wants. 

Although the writer's firm specializes in one branch of con- 
struction work the system is equally applicable to any other work 
of similar nature, whether in the line of heavy engineering or the 
building of modern office buildings or frame dwelling houses. 

Section I. — The Analysis. — At the start of a job, an estimate 
is made of its cost in the usual way. This estimate is then 
analyzed to show its component costs. Figure 216 shows an 
estimate on a small job executed by the Aberthaw company 
this year. Figures 217 and 218 show the analysis of the same. 
This analysis is almost self-explanatory but it will be well to 
call attention to one or two points in it. It will be noted 
that the seven items of concrete and finish in the estimate 
have been resolved into 19 items in the analysis, and the seven 
items of forms in the estimate have been resolved into 11 
items in the analysis, and so on, each item being resolved into 
its component parts, and where these parts are alike in two 
items adding them together. For instance, concrete labor in 
footings appears by itself, but the cement, sand and stone are 
added to those in the columns and floors. By adding together, 
it will be found that the seven items of concrete in the estimate 
have the same total cost as the 19 items in the analysis. 



470 CONSTRUCTION COST KEEPING AND MANAGEMENT 

This analysis is used as a basis of comparison during the life 
of the job, and the original estimate is not referred to at all. This 
is different from the general practice, as it is usual to build up 
the units of labor costs on a job in a synthetical manner to 



timjie No. IllO 



ABERTHAW CONSTRUCTION CO., BOSTON 



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Fig. 216. — Summary of estimate. 



compare with the estimate, rather than to analyze the estimate 
to compare with the units on the job. This is a very important 
feature of the system and is a solution of one great difficulty. 
The usual method is to try and build up the price of each item 
from the information on unit costs given, so as to compare it 



SYSTEMS OF COST KEEPING 



471 



with this item in the estimate. Take, for instance, the item of 
concrete. The price of concrete is compiled by reckoning up the 
labor of unloading cement, sand and stone and the cost of these 
materials, and also the labor of mixing and placing and finishing 



MK. l^d ABERTHAW CONSTRUCTION CO. sh«tN» f 


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Fig. 217. — Analysis of estimate (continued in Fig. 218). 

the concrete and the cost of the tools and plant. (I do not 
mention forms, which I regard as an entirely distinct and different 
item.) If at the end of a month 500 cu. yd. of concrete have been 
placed and material enough to mix another 600 cu. yd. is on the 
ground and all the plant is set up, it will be a very difficult matter 



472 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to determine exactly how much labor and material should be 
charged to work which is done and how much is chargeable to 
future work. If all the mason's staging is erected and only 
one-third the brickwork is done, the cost of brickwork will be 



tax. tqao ABERTHAW CONSTRUCTION CO. s^N^i 


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unbalanced in the same way. To solve this difficulty we use 
an analysis of the estimate and keep the costs on each item of the 
analysis separately. The estimate is put away and never 
referred to again, and all comparisons are made with the analysis. 
You will see when I describe the monthly statement how easily 



SYSTEMS OF COST KEEPING 473 

this takes care of difficulties like those referred to, or to unfinished 
work. It is not until the job is completed and the books are 
closed that I make a synthetical summary showing what a 
cubic yard of concrete or a cubic foot of brickwork has cost. 

I lay stress on this because the difference between analysis 
and synthesis in accounting is, vital, and it is my belief that it is 
not possible to get a clear and accurate idea of the fluctuations 
of cost on construction work by a synthetical method, because 
labor and material and overhead expense are so distributed 
that they cannot be properly identified or criticised. It will 
be noticed that labor and material are kept in separate columns 
in the analysis and are kept entirely distinct all through the job. 
For accounting purposes, material includes sub-contracts, 
insurance, traveling expenses, electric power, etc., and in fact 
everything except labor and teams. Teams when hired by the 
day are reckoned as labor, but teams working under contract, at 
an agreed price per load, per yard, etc., are reckoned as sub- 
contracts and kept in the material account. 

On the work of most contractors it will be found that the 
amount and cost of the materials will not vary very much, and, 
except for checking consumption of cement, coal and lumber, 
the profit or loss made on materials at the start of a job will 
remain steady all through. But the labor does fluctuate exceed- 
ingly from week to week. It is on the labor side that most of 
the losses or profits may be expected. In this paper and in the 
writer's firm a good deal more attention is given to the labor side 
than to the materials. At the same time the material must not 
be overlooked, as wasteful use of cement, lumber, etc., may run 
the cost of a job up unexpectedly, to say nothing of the need of a 
periodical check, if there is any suspicion of graft among 
subordinates. 

We furnish a copy of the analysis in notebook form to the 
superintendent on the job as well as to our general superin- 
tendent and to the heads of the firm. This is particularly useful 
to the job superintendent, as he knows what the office expects 
him to accomplish in the way of costs. If his judgment on 
costs is not sound, it tells him what the items of his work ought 
to cost. 

Section II. — The Code. — Having analyzed the estimate, 
instructions are made out for the timekeeper in the form of 
a code, which is shown in Table 14. This code is made up from 



474 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the standard mnemonic code used by the author. The code 
differs from that used by other contractors only in the fact that 
the mnemonic principle is used instead of numbers, and that the 
divisions of time have been carried a good deal further than is 
usual. Although this does not seem to be an important item 
in itself, it is so because it simplifies the work of the timekeepers 
on the job to a very large extent, and insures more accurate and 
intelligent reports being made from the job. 



Table 14. — Standard Timekeeping Code 

Main Divisions — Kinds of Work 
Initial Letter: 
P Plant. 

D Digging, earthwork and rockwork, and items in connection. 
M Concrete. 
F Forms. 
R Reinforcement. 
K Finish of concrete surfaces. 

C Finish carpentry (windows, flooring, etc.) and any carpentry not belong- 
ing to P, D or F. 
S Miscellaneous steel and iron work and other metal work. 
B Brick masonry, stonework, tile, Akron pipe, etc. 
Z Miscellaneous. 
X Extra work (prefix to any of above). 



Subdivisions — Kinds of Labor 

Second Letter (for all main divisions except D and K) : 

a Making or preparing, viz., making up forms, mixing concrete, bending or 
fabricating steel, etc. 

e Erecting, placing or building, viz., erecting forms, placing concrete, 
laying brick, fixing sash, etc. 

i Removing, stripping or cutting away, viz., stripping forms, cutting away 
concrete or brick, etc. 

o Repairing, viz., patching voids in concrete, repairing mixer, etc. 

u Receiving, unloading, piling, loading, etc., viz, receiving cement, sand, 
lumber, etc., unloading and storing same, unloading plant and re- 
loading at close of job, etc. 

Second Letter with D: 

a Excavate. 

e Backfill. 

i Pumping. 

o Grading. 

u Drilling and blasting. 



SYSTEMS OF COST KEEPING 475 

Second Letter with K: 

a Picking. 

e Plastering. 

i Rubbing with carborundum. 

o Repairing, filling voids, cleaning floors, etc. 

u Granolithic finish laid integral with the slab. 

ua Granolithic finish laid after concrete has set. 

y Cement wash. 

Subdivisions — Location of Work in the Building 

Third Letter (for all main divisions except P, S and C) : 

b 

be Belt course. 

e Columns. 

ch Column heads (mushroom). 

cc Cinder concrete. 

d Footings. 

dp Drain pipe (tile). 

f Floors. 

fs Floor slabs. 

fb Floor beams (beam construction). 

fm Corrugated metal to slabs. 



h 


Cellar or basement. 


j 
k 


Cornice. 


1 


Lumber. 


m 


Monitor or pent house 


n 


Lintels. 


P 


Paving or sidewalk. 


q 




r 


Rubbish. 


s 
t 

V 


Stairs. 


Vault lights. 


w 


Walls. 


rw 


Retaining walls. 


ws 


Window sill. 


cw 


Curtain walls. 


X 


Cement. 


y 


Sand. 


z 


Stone or gravel. 


Third Letter with C: 


c 


Column. 


d 


Door. 


df 


Door frame. 


dt 


Door trim. 


f 


Floor. 



476 CONSTRUCTION COST KEEPING AND MANAGEMENT 



fb 


Floor beam. 


fs 


Floor screed. 


fp 


Sub-floor plank. 


ft 


Top floor maple. 


g 


Gates. 


h 


Hardware. 


ho 


Operating gear. 


J 

k 


Cornice. 


1 


Lumber. 


m 


Monitor or pent house 


ms 


Monitor sash. 


n 


Lintels. 


P 


Partition. 


pl 


Platform. 


r 


Roof. 


rb 


Roof beam. 


rp 


Roof plank. 


rt 


Roof truss. 


s 


Stairs. 


t 




V 




w 




X 




y 




z 


Miscellaneous. 


Third Letter with S: 


b 


I-beams, channels, etc. 


c 


Columns. 


cb 


Column bases. 


d 


Doors. 


dg 


Door guards. 


df 


Door frames. 


ds 


Door sills. 


fl 


Flashing. 


g 




h 




J 


Bolts. 


k 
I 


Cornice. 


m 




n 


Lintels. 


P 


Pipe. 


q 




r 


Railings, gratings, etc. 


s 


Stairs. 


sr 


Stair rails. 


si 


Sleeves. 


t 


Trusses. 



SYSTEMS OF COST KEEPING 477 

v Inserts for sprinklers, etc. 

w Windows. 

ws Window shutters. 

wg Window guards. 

x 

y 

z Miscellaneous. 

Third Letter with P: 

h Boiler. 

c Crusher and elevator. 

ch Chute. 

d Derrick. 

f 

g Locomotive, portable engine and boiler. 

h Hoisting engine. 

J 

k 

1 Elevator tower, bucket and hoist. 

m Mixer and engine. 

n Temporary buildings. 

p Pump. 

q 

r Runways, staging, ladders and guardrails, etc. 

s Wood-working shop, saw bench, planes, etc. 

t Track. 

v 

w Water supply. 

x 

y 

z Miscellaneous. 

All contractors who have attempted any cost keeping will 
agree on the necessity for some sort of a code to report work 
done, not on the ground of secrecy but to obtain concise, quick 
descriptions. It has been found that if timekeepers are simply 
told to report the work done and describe it, their descriptions 
will be misleading and verbose, and in going their rounds they 
will probably make up a code for themselves which afterwards 
they have to turn into a written description. 

It may be worth while to spend a little time in explaining the 
principles of the mnemonic code used. The initial letter is 
always a capital and indicates the kind of work to be done. 
For instance, "M" stands for Concrete Masonry, "F" for Forms, 
"R" for Reinforcing Steel, S for Structural Steel and Miscellane- 
ous Iron Work, "B" for Brickwork, and so on. As far as possible 
the initial letters chosen are mnemonic, that is, they are the first 



478 CONSTRUCTION COST KEEPING AND MANAGEMENT 

of the items they represent. The second letter is always a letters 
vowel and indicates what is being done in the division of work 
which it is describing; "a" stands for making items before set- 
ting, and "e" stands for erecting or setting or fixing in place; 
"i" stands for stripping or removing or pulling down; "o" 
stands for repairing or patching; "u" is a general utility item 
standing for unloading and other similar items. It will be seen 
that these are mnemonic in that each vowel is the vowel sound 
of the word that it represents. The third letter, which is always 
a consonant, indicates mnemonically the place or part of the 
building in which the work is done; that is, "f " indicates floors, 
"c" columns, "b" beams, "k" cornice, "1" lumber, "d" doors, 
and so on. As far as possible these are mnemonic, but it is not 
possible to make every item so, and some consonants have to be 
arbitrarily chosen to make out. As the standard code is the 
same on every job and is used simply with adaptations to meet 
the requirements of the work in hand, these arbitrary symbols 
are quickly learned. It will be noticed that the third letter has 
be a different one in the case of items relating to plant. 

It should be an easy matter to revise this code to apply to any 
other sort of construction work, or to industrial work of any 
kind, bearing in mind the general principles on which it is 
framed. 

Although at first sight it looks complicated, yet it has been 
found to be very simple in practice, and new timekeepers and 
superintendents very quickly pick up its essentials. 

It has the advantage that if any work is done on the job which 
was not known of or contemplated when the original code was 
made out, it is a simple matter to adapt the letters and make up a 
fresh code word for the new work. As a matter of precaution, 
we always require our timekeepers to give the explanation of a 
new code whenever he makes one up, although very often we can 
read them without such explanation, owing to our familiarity 
with the principles on which the code is based. 

From the standard code as given above a special code is written 
out in the head office for the job before the work is started, and 
from time to time additions are made from the office or by the 
job, to meet special items of work met with on the job; but all 
the main items of work, such as concrete in columns and floors, 
forms and reinforcement, have the same code word at all times, 
for example: 



SYSTEMS OF COST KEEPING 



479 



M — Concrete 


Mix 


Place 


Fill voids, 
smooth 
up, etc. 


Footings 


Mad 
Maf 
Mac 
Maw 


Med 
Mef 
Mec 
Mew 


Mod 


Floors and roof 


Mof 


Columns 

Walls 


Moc 

Mow 



F — Forms 


Make 


Erect 


Strip 


Footings 

Floors and roof 


Fad 
Faf 
Fac 

Faw 


Fed 
Fef 
Fee 
Few 


Fid 

Fif 


Columns 


Fie 


Walls 


Fiw 







Section III.— The Timekeeping.— (a) The Field Sheet—On / 
the job the timekeeper is supplied with what we call a "field 
sheet," an example of which is shown in Figs. 219 and 220. 
This field sheet is, we believe, an innovation in timekeeping. 
A fresh sheet or sheets is used every day and is carried around by 
the timekeeper on the job. In the left-hand column he enters 
the numbers of all the men who are at work, and it will be noticed 
that the tenth line is a heavy line and that numbers 10, 20, 30, 
and so on appear on these heavy lines always, and if necessary, 
blanks are left in between to insure this being done. (The ob- 
ject of this will be explained later.) After having checked the 
men in, in the second column from the left, the timekeeper 
starts on his rounds and in the column headed 7 to 8 he places 
against each man's number the code word for the work he is 
doing. On making his second round, which is usually about 10 
o'clock, if the man is still on the same work he simply places a 
check in the intervening columns to show that the same work is 
going on. The timekeeper has to make at least four rounds 
every day and has to find each man on every round. If a man 
is not found, his pay is docked unless he can satisfactorily explain 
where he was. 

It will be noted that the field sheet provides columns for 
checking the men in after the noon hour and for checking men 
out at night and for overtime. The last column is the total 



480 CONSTRUCTION COST KEEPING AND MANAGEMENT 

number of hours worked during the day, which is used in making 
up the pay roll, as will be shown later. 

In going his rounds, the timekeeper carries the field sheet in a 
stiff binder similar to that used by the express companies. On a 
large job, sometimes as many as six or eight sheets are used every 



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ABERTHAW CONSTRUCTION 



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Fig. 219. — Timekeeper's field sheet (continued in Fig. 220). 



day. They are, of course, all numbered up with the numbers of 
the men before he starts on his rounds. The advantages of 
this field sheet are as follows: 

1. The timekeeper keeps a permanent record of what the men 
are doing every hour in the day. This is an improvement on the 
old method, when timekeepers used to take the time on old 



SYSTEMS OF COST KEEPING 



481 



pieces of scrap paper, backs of envelopes, or pieces of old board, 
and kept no permanent record of the work in any form. In 
that way men were frequently missed and their time afterwards 
guessed at, and there was no check on the men that showed 
they were all at work. 



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ERTHAW CONSTRUCT 

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Fig. 220. — Timekeeper's field sheet (continued from Fig. 219). 



2. The superintendent can easily check the work of a time- 
keeper. Most of our superintendents, each time that they go 
out no to the work, make a note of the numbers of three or four of 
the men and note what they are doing at that time, and on com- 
ing in refer to the timekeeper's field sheet to see what work he 



482 CONSTRUCTION COST KEEPING AND MANAGEMENT 

has entered them as being on, and by picking out at random a 
few men every day in this way it is easy to find out whether the 
timekeeper is doing his work correctly. 

3. It is easy to disprove men's claims for more time than 
they are allowed, as in addition to the record on the pay roll 
we have this actual check on what the men were doing hour by 
hour, and a man who claims his time is short is confronted 
with the field sheet, which shows exactly what he has been 
doing. 

4. On a large job, two men can work together on the time- 
keeping, for on a job where the pay roll is as much as $4,000 a 
week it is all one man can do to go round the work and note the 
men's time. He turns in his field sheet to an assistant time- 
keeper, who makes out the pay roll and time sheets from it. 
Under the old methods, when rough notes were made on scrap 
paper, this would be a very difficult if not an impossible- thing to 
get done correctly, and the result would be that the timekeeper's 
field work would suffer and the cost accounts would be inaccurate. 

There are necessary limits to the number of subdivisions 
made in the work. Some timekeepers with more zeal than 
discretion will multiply subdivisions without end if not watched. 
It is a standing instruction to our men that the laborer who 
shakes out and bundles cement bags is to be charged to the 
largest concrete item of the day, and that the saw filer is to be 
reported on the largest piece of form work. All time on tem- 
porary dams for construction joints in concrete floors are re- 
ported with floors. The superintendent, timekeeper and water 
boy are not so charged, but are prorated on every item, as will be 
seen in Section IV (A). 

(6) The Time Sheet.— Figures 221 and 222 show the daily 
time sheet. In this it will be noted that the ruling is the same 
as on the field sheet, with every tenth line reserved for numbers 
10, 20, 30, and so on, so that the men's numbers appear always 
on exactly the same line on each sheet. In the left-hand column 
are the numbers of the men and on the top of the succeeding 
column are written the code words of the work in progress. 
Under these is entered against every man the number of hours 
he has spent on the section of the work denoted, and on the 
right-hand side is a column for the man's rate. The next two 
columns are headed "For Office Use," and when the sheets 
come into the office the total amount spent on each subdivision 



SYSTEMS OF COST KEEPING 



483 



of the work is worked up and entered there, as is shown in the 
example. The extreme right-hand column is reserved for the 
report of the quantities of the work done, which are entered 
by the timekeeper every day, or, in some cases where the work 
is unfinished at the end of the day, every second or third day. 



won., iq 

«■ N.rt 


7° ABERTHAW CONSTRUCTION 

Heed MftSS DAILY TIME SHE 


cor 

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Fig. 221.— Daily time sheet (continued in Fig. 222). 

These sheets are entered up by the timekeeper on the job, 
sometimes in the evening after the day's work is done, but usu- 
ally in the morning following the day in which the work was 
done. They are mailed to the office daily. 

(c) The Pay Roll. — Figures 223 and 224 show the payroll, 
which is also ruled up in sets of ten lines, like the field sheet and 



484 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the time sheet. This is similar to all contractors' pay rolls and 
needs no comment, except to point out the immense saving 
of time that has been made by the use of time sheets, field sheets 
and pay rolls, all ruled uniformly, and insisting on leaving blank 
spaces rather than using every line on the time sheets and pay 



tobNo. /<jf« 


ABERTHAW CONSTRUCTION 

«,<C _yV»SS DAILY TIME SHE 


CO? 

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Fig. 222.— Daily time sheet (continued from Fig. 221). 



roll. The pay roll is filled in simply by placing the field sheet 
over the pay roll, and transferring the number of hours' work 
without even referring to the men's number. The pay roll is 
then checked by the time sheet, so that there is a circular check 
on the whole of the operation. 



SYSTEMS OF COST KEEPING 



485 



(d) The Quantity Report. — This has already been referred to 
when considering the time sheet. It is of course of vital im- 
portance that the quantities should be accurately reported. 
We make it the duty of the engineer in charge of the level and 
transit to compute the quantity of work done each day and turn 



Job Hl. 


iqqo 

Norttw 


ABERTHAW CONSTRUCTION COMPANY, B< ston 

rf /?«! P*Y ROLL From 


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Fig. 223.— The pay roll (continued in Fig. 224) 

it in to the timekeeper to enter in the column provided. It is 
often a difficult matter to insure correct reports being received 
on the quantities of work done, and at the time the system was 
installed the writer made a practice of visiting jobs monthly 
and making a rough survey of them whereby he could calculate 
from his original estimate the quantity of work done, and using 



486 CONSTRUCTION COST KEEPING AND MANAGEMENT 

this as a check. The practice on our work has improved a good 
deal since then and it is very seldom necessary now to make this 
check, but it is one that should not be neglected by one starting 
on a cost accounting system, as without this check the cost ac- 
counts may be rendered worthless by quantities either in excess 



Jo. Bo. 


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ABERTHAW CONSTRUCTION COMPANY, B 


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Fig. 224. — The pay roll (continued from Fig. 223). 

or less than the actual amounts being reported. On one job, 
some years back, we found that a superintendent had reported 
20,000 sq. ft. more forms than he had put up, with a view to 
making his costs look low and getting credit for economical 
work. Our estimates show what the total quantities should be, 



SYSTEMS OF COST KEEPING 487 

and an occasional survey and a final comparison will prevent any 
such errors being made now. 

In concrete work the only item of labor that can be checked 
from the bills is the steel reinforcement, and every other quantity 
has to be obtained by scaling and computation. This is also 
true in most other branches of construction work, with the 
exception of structural steel. 

(e) The Inquiry Form. — We also use a brief standard form in 
case of any apparent mistakes on any of the reports received from 
the field. Often a man's rate is entered wrongly, or a different 
number of hours appears on the pay roll to that on the time sheet, 
or time is reported with no quantities or quantities with no 
time. It is only by picking up all these mistakes at once and 
having them corrected that a system is kept going properly, 
and the men in the field, knowing that their work is carefully 
watched, are more keen in getting work done accurately. This 
may seem to be a trivial detail, but the writer's experience is that 
it is not possible to get accurate and careful work from men in 
the field unless careful attention is paid to the smallest items, and 
any inaccuracies or omissions are promptly followed up. If the 
men on the job are made to realize that their works is important 
and really counts for something they will be a good deal more 
careful and eager to cooperate with the office in matters like this. 

Section IV. — The Work in the Office — Labor Records 

(A) Working up the Time Sheets. — As soon as the time sheets 
come into the office, the total cost of each operation is worked out 
and entered in the column headed "For Office Use" on the time 
sheets, as shown in Fig. 221. At the end of the week the totals 
are drawn off on to an abstract sheet, shown in Fig. 225, and the 
items are totaled. The overhead labor expense (superintendent, 
timekeeper, waterboy, etc.) is then distributed by adding a 
percentage to each item, and the complete cost of each operation 
for the week is determined. The quantities are then written 
underneath each one and the unit costs worked out. They are 
then entered on the office record sheets, which will be described 
in the next section, and under them is entered the total quantity 
of work done to date (which is obtained from the office sheet) and 
the average cost of the work to date. 

(B) The Weekly Summary. — Figure 226 shows a copy of the 
weekly summary of labor costs. The top line shows the total 



488 CONSTRUCTION COST KEEPING AND MANAGEMENT 

amount spent during the week on the items. The second line 
shows the quantity done, and the third line the unit cost. There 
are then left two or three lines for notes; in the case of concrete 
the number of barrels of cement used and the number of cubic 
feet of concrete obtained with a barrel of cement is noted. The 



J.bN.. IfaO ABERTHAW CONSTRUCTION CO. 

WA5TE 5HEET qx[ifi*fi 


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Fig. 225. — Waste sheet — quantities and unit costs. 



two lower lines show the total quantity of that kind of work done 
to date and the average cost. Four copies of this sheet are made 
every week, and are furnished to the heads of the firm and the 
general superintendent, and one copy goes to the superintendent 
in the field. He also has a copy of the analysis. With these 



SYSTEMS OF COST KEEPING 



489 



two he is able for himself to see how the costs of his work are 
running and how they compare with the estimate. Most of our 
superintendents also work out daily unit costs in the field on the 
larger items of the work, to keep more closely in touch with their 
costs. We believe in letting our men know just what we expect 
of them in the way of costs, of letting them know just how they 
are coming up to or bettering our expectations. Since we 
adopted the plan of letting them know what the weekly costs 
were there has been a marked improvement in the unit costs and 
a real enthusiasm for getting low costs. 



ABERTHAW CONSTRUCTION CO. BOSTON . 
Job No. IQQO Al NorU.«Md rfRSS WEEKLY SUMMARY Week ending July 2 .11)13 


In. 


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Fig. 226. — Weekly summary. 

I may be asked why we do not "go one better" and work out 
daily costs in the office instead of weekly. — The reason this is not 
done is not on the ground of expense although it would be a 
very expensive proceeding — but because if we worked out 
the cost of every item each day we should have such an over- 
whelming mass of figures to study that we should never have 
any clear idea as to how the job stood; and then, again, the 
costs would show such astonishing variations from day to day 
that in many cases they would be useless. For example, sup- 
pose a line of sheet piling set up and braced one night, but 
not driven right down until the next day, following our rule 
(to report quantity when work is done) one day would show 
a large expense in money and no quantity, the next a large 
quantity with small expense and exceedingly low unit cost. 



490 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(C) The Office Labor Sheets. — Figure 227 shows the regular 
record of the labor which is kept in the office. This sheet shows 
only a few items and there should be about ten or twelve sheets 
for every job. It will be seen that the first column contains the 
date, the next the quantity of work done during the week, the 



** No. tqqo ABERTHAW CONSTRUCTION CO 


-C°*rrvr'tAlBbn X 




ffwoMy (Wiwr ~n><J $ fl M «<p . ~jSiltC* C J Ml. 


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Fig. 227. — Office labor sheet. 



next the unit cost of that work, and the next column the total 
cost of that work. The next column contains the average cost 
of the work to date, combining the week's work with all the 
previous weeks. In the case of concrete, two additional col- 
umns are used, giving cement used and the proportion of the 



SYSTEMS OF COST KEEPING 491 

mix. These are entered up from week to week from the abstract 
mentioned previously. The totals are kept in pencil at the foot 
of the columns and altered from week to week, so that it is a 
simple matter to add one week's work to the total of the preceding 
week and work out the average unit cost. 

On some items, such as forms, the cost of making, erecting and 
stripping of forms is carried in separate columns, and another 
column is kept for the total unit cost of the work to date. This 
is obtained by adding the totals of the three money columns and 
dividing by the number of square feet erected. This inclusive 
unit cost does not give quite such an accurate idea of the cost as 
the three subdivisions do, as all the making is done at the begin- 
ning of the job and some of the stripping may not come until a 
good while after, but is in many cases a very useful figure to 
have, and it is, of course, the figure which compares with the 
analysis which is made out at the beginning of the job. As 
already mentioned, when the cost of the item for the week has 
been entered, the average is worked out and then the resulting 
average and the total quantity to date is transferred back to 
the waste sheet from which the weekly summary is made out. 

Section V. — In the Office — The Material Records 

Figures 228 and 229 show a part of the material records kept in 
the head office. These are entirely distinct from the bookkeepers' 
records and are not a ledger account. No merchants' names appear 
as a rule, but chiefly quantities of materials and costs. 

The records are kept on loose sheets and at the start of the job 
columns are headed for each item that appears in the analysis. 
In some cases these items are subdivided. Then every item of 
expense is entered under its proper heading regularly as the 
work goes on. Freight in every case is entered with the item to 
which it relates. Demurrage also is entered in the columns of 
"Cement," "Brick," "Lumber," etc., as the case may be. The 
column headed "Cement" will also contain items of freight, 
freight on empty bags, credit on empty bags, tests, demurrage, 
etc., so that the final price per barrel of cement that appears in 
the final summary may be several cents higher than the price 
entered on the original order, especially if many empty bags 
have been lost. There is no column for all lumber. Lumber is 
entered under "Plant," "Forms," "Roof Plank," "Coffer- 



492 CONSTRUCTION COST KEEPING AND MANAGEMENT 

dams," "Temporary Buildings," etc., according to the use it is 
to be put to. If lumber is bought for sheeting trenches and 
afterwards used for forms, it is first entered to the excavation 
item and then its second-hand value is credited and charged to 
forms. Credits are entered in red and in the same columns as 



S» 



ICjCjO 



ABERTHAW CONSTRUCTION CO. 

MKTERIPiL R.rCQR.V.5 
VLftNT 



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Fig. 228. — Material records (continued in Fig. 229). 



debits, as there are very few of them and it would be cumbersome 
to have to keep double columns for each item to provide for 
possible credits. 

To get hold of the information entered in these sheets the 
procedure is as follows: All bills are sent to the job to be checked 
and returned to the head office, from whence they are paid. As 



SYSTEMS OF COST KEEPING 



493 



soon as the receipted bills come in they are sent to the cost 
accounting department. They are then entered up in a waste 
book and at once returned to the bookkeepers. One waste book 
only is kept, and the bills are entered as they come in, a page 
at a time being kept for each job number, and another page 







Job No. Hjifg 


ABERTHAW CONSTRUCTION CO. Shed No. J. 






KtlnroR.C£r1CHT CONCRJCTL To «. (v/ S 








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Fig. 229. — Material records (continued from Fig. 228). 

taken when one is filled. When the bills are checked at the job, 
the material clerk notes on same what the material was used for 
(as in the case of lumber just referred to). This information is 
usually put in by using the timekeeper's code and then there is 
no question in the cost accounting department as to where to 
charge any unusual item. The use of the waste book is simply 



494 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to save time. The weekly labor summaries take precedence 
in the cost accounting room, and on the last three days of the 
week we are much too busy getting these out to give any time to 
the material sheets. These can be entered up later in spare 
moments. Once a month, at least, each job is brought up to 
date and the total compared with the bookkeeper's ledger. 
All orders are also examined by the cost accounting depart- 
ment, and a note sheet kept on each job of all large orders and 
sub contracts, so that when a monthly statement is made of the 
financial standing of the job these can be included. The saving 
or loss on the estimate when a contract such as painting is sublet 
is not made when the final payment has been made, .but when the 
order is given, and should be taken into account then. We do 
not, however, keep a record of any but the big orders, as the 
thousand and one small items of nails, bolts, tools, etc., are 
billed and paid for very soon after receipt and quickly find their 
place in our records from the bills. 

Section VI. — The Monthly Statement. 

Figure 230 shows the statement which is prepared monthly to 
ascertain the amount money saved or dropped on the job. These 
are not made for every job on the same day, but by taking two or 
three jobs in turn each week we make it part of our regular 
routine without undue pressure at any time. 

The weekly summaries showed labor costs only. If any item 
(excavating, for instance) was costing 20 cts. per yard more than 
the estimate, it did not show how many dollars the total loss 
amounted to. Every job fluctuates from week to week. Some 
items are over the estimate and some show a saving. This 
statement brings these items all into view in such a way as to 
show how serious an over-run may be, and the final footings show 
within a very small amount just how the job stands. • 

The way the sheet is made up is — first to copy from the analysis 
the description of all the items and place the unit prices in the 
column provided on the left. Then from the labor and material 
records to enter in the "Actual Cost" columns quantities of work 
done and materials purchased, with their unit costs and total 
costs to date. Then to work out in the "Estimated Cost" 
column the cost of the quantities done at the estimated prices. 
Then to enter all sub-contracts made in the "Actual Cost" 



SYSTEMS OF COST KEEPING 



495 



column and the corresponding "Estimated Cost," and finally 
to work out the totals saved or lost on each group of items. 
A glance at the sheet (see Fig. 230) will show some considerable 
variations from the original estimate. It is not within the scope 
of this paper to discuss the actual costs on this work, but it will 



j» No. //j ijo ABERTHAW CONSTRUCTION CO. 




Shod No. 


Honlklj Jliltm^-nt »f Costs h S. 


incluc 


,y l/(/NC »?« 


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Fig. 230. — Monthly statement. 



be well to point out what is shown on the sheet and to give a few 
explanations as to local conditions to make things clear. 

It will be seen, first, that concrete labor is running very close 
to the estimate, although the quantity placed in the footings was 
18 yd. in excess of that estimated. Plant shows a loss of 



496 CONSTRUCTION COST KEEPING AND MANAGEMENT 

chiefly on the labor items. An old construction elevator was 
sent to the job, which was rather out of repair and several parts 
had to be refitted or remade before it could be erected. There 
is also a loss on the sand a,nd stone. It was found that the crusher 
which had been counted on to supply us could not be depended 
on, and we therefore had to purchase from a quarry further away, 
which had a railroad delivery, and to unload and team from the 
railroad, which was about a mile away. As we were thus using 
teams regularly we decided to buy f . o. b. teams at the pit, instead 
of f. o. b. at the job, so as to keep teams steadily employed, so the 
statement shows a saving on sand and stone offset by an overrun 
on teaming. It is not necessary at this time to discuss the other 
variations, but simply to note that the difference between the 
savings and the losses shows a net loss of $230 on the estimated 
total. 

The amount of contractor's profit does not appear on these 
sheets or in any of the cost accounting records, and the amounts 
of savings or loss in the monthly statements have to be added to 
or deducted from the estimated profit. 

Section VII. — Monthly Comparison of Best Performances 

Table 15 shows a statement which we prepare monthly showing 
the unit labor costs of the three or four principal items of con- 
struction on all jobs during the preceding month. A copy of this 
sheet is sent to every one of our foremen and superintendents. 
This is'not an essential part of our system, but it is awaited with 
great interest by our field superintendents and has proved a very 
useful factor in stimulating a general interest in the timekeeping 
and cost accounting work, and is an additional incentive to our 
men to try for low costs. 

The costs shown on this statement are nearly always lower 
than our average costs, as they show the best work done month 
by month and do not bear any preliminary expense or other 
incidental items. They will give some idea of what can be done 
under favorable circumstances, but would not be a safe guide 
for estimating future work. 

Section VIII. — The Final Comparison 

Figures 231 and 232 show the final comparison of estimated 
with actual costs. This is similar to the monthly statement 



SYSTEMS OF COST KEEPING 



497 



Table 15. — Copy of Sample Sheet Showing Monthly Comparison of 

Best Performances 

Principal Unit Costs for Month of October, 1911 





Job 


Cubic 


Unit 




No. 


yards 


cost 


Conciete — Unload, mix and place: 








N.B. 2 mixers on Job 941 








Largest 6 days' run of concrete 


917 


313 


$0.71 




941 


2,205 


0.38M 




944 


602 


0.62>i 




946 


558 


0.57 


Largest 1 day run of concrete 


917 


1073^ 


0.80}i 




941 


451 


0.38 




944 


150 


0.54^ 




946 


233 


0.51K 


Lowest day's unit cost — floors 


917 


96 


0.683^ 




941 


408 


0.31^ 




944 


16 l A 


0.31M 




946 


132 


0.38 


Month's average unit cost 


917 


700 


1.17 




941 


5,030 


0.59J^ 




944 


1,418 


1.02 




946 


393 


0.84 






Square 


Per 100 






feet 


sq. ft. 


Forms — Erecting only: 








Floor forms 


917 


45,628 
291,016 


$3.53 




941 


3.92 




944 


82,107 


6.24 




946 


24,568 


7.10 


Wall forms 


917 
941 


None 
31,556 


None 




5.80 




944 


3,855 


9.59 




946 


15,247 


7.47 


Column forms 


917 


3,725 
41,260 


3.17 




941 


7.15 




944 


11,494 


9.08 




946 


7,095 


10.05 






Tons 


Per ton 


Placing floor steel (beam and slab) 


917 


82.18 


$5.36 




941 


886 . 50 


4.17 




944 


63.82 


6.47 




946 


37.00 


6.85 


Bend and place column steel 


917 


6.56 


5.30 




941 


14.33 


2.84 




944 


15.92 


8.62 




946 


7.33 


14.71 



498 CONSTRUCTION COST KEEPING AND MANAGEMENT 

(Section VI) and needs no further explanation as to the method 
adopted, but a brief notice of some of its chief features will be 
of interest. 

The cost of laying wood screeds to receive the top flooring 
was unexpectedly high. The bulk of it was done in one week 



Job No. iqao ^/ ABERTHAW CONSTRUCTION CO. 




Stvee* No. / 


■^ArMJieX/e/ £*/•** ~~J..r^a4 


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Fig. 231. — Final statement of costs (continued in Fig. 232). 



at the close of the job when the best men had been transferred 
elsewhere, and is a good illustration of necessity of unceasing 
vigilance in superintendence to avoid sudden drops like this. 
The rest of the carpenter work was very well done, showing a 
saving of $944 on the forms. Plant continued to run high; 



SYSTEMS OF COST KEEPING 



499 



110 tons less of stone was used then estimated, owing to its being 
extremely well graded and therefore economical in use. Cinders 
cost three times the estimated amount, owing to there being 
none available at the owner's plant and no other factories near 



j* No, iqcfc ABERTHAW CONSTRUCTION CO. 


»«N.. 


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Fig. 232. — Final statement of costs (continued from Fig. 231). 



which could supply us. Some of the cinders had to be teamed 
4 miles. 

Section IX. — The Final Summary 

When the job is completed and all accounts are paid, the 
figures are worked up into a final summary which shows the 



500 CONSTRUCTION COST KEEPING AND MANAGEMENT 

costs in the same manner as the original estimate. The cost of 
plant, cement, etc., is added to labor cost of forms, and in 
general figures are compiled which correspond with the pre- 
vailing methods of figuring construction work. 



JolN. iq -jo ABERTH AW CONSTRUCTION CO. Shw N.. / 


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Fig. 233. — Final summary of cost accounts (continued in Fig. 234). 



The final summary on the job from which my other exhibits 
have been taken is not yet made up, so I have taken one from 
another job, a storage building, completed last year (see Figs. 
233 and 234). It shows the method of setting out the figures so 
that, at a glance, any of the important details of the cost can 
be referred to. The final summaries of all the jobs are bound 



SYSTEMS OF COST KEEPING 



501 



together in a loose-leaf book and are not filed with the job records. 
They are thus always at hand for ready reference when estimating 
future work. 



!.k N.. r<j 7 o ABERTHAW CONSTRUCTION CO. 


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Fig. 234. — Final summary of cost accounts (continued from Fig. 233). 



Conclusions 

The system has been used by the Aberthaw Construction Co. 
for over 2 years, and it is interesting to look back and see what 
results can be traced to an accurate system of cost accounting. 
In comparing my estimates of 5 years ago with those made today, 
I find that I estimate concrete labor at least 40% lower than then. 
On the other hand, I have found that not half enough money used 



502 CONSTRUCTION COST KEEPING AND MANAGEMENT 

to be figured for plant and tools. Our labor costs on forms have 
come down over 25%, but I think that most of the saving on 
this item is due to improved designs and methods of erection 
than to a study of the unit costs. Steel reinforcement is handled 
for probably 10 % less than before. Our superintendents have all 
got a good knowledge of costs, and are really interested in fol- 
lowing them from week to week. If a special and unusual piece of 
construction work is to be built, our men are keen to find out just 
what it costs. 

Some time ago a large job began to show high unit costs; 6 
weeks after the footings were complete the monthly statement 
showed that labor had overrun the estimate by $10,000. From 
any point of view but the cost accounting the job looked all 
right — well-organized, and a large force of men all working busily. 
Each week's report showed unit costs as high as it predecessor. 
At the expiration of the 6 weeks the organization of the job 
entirely changed; a new carpenter foreman was put on and 
several other alterations in the force were made, and at once 
costs began to go down. At the end of the whole job the whole of 
the $10,000 overrun had been picked up and a saving of about 
$700 made on the estimated labor costs. It is not often that 
such extensive changes are needed, but often on a job some item 
runs too high for 2 or 3 weeks. Special attention is given 
to that item until it is reduced to its normal level. I believe that 
our system is a reliable barometer, showing from week to week 
what our jobs are doing. The contractor does not want a 
postmortem which, however interesting, does not bring back lost 
profits. He wants to know as the job goes along whether he is 
making money or not, where his profits or losses are, and whether 
his losses can be stopped. 

Our system is elastic enough to take care of any special situa- 
tions or furnish any information required. A little time back, I 
wished to analyze closely the cost of our form work with a view 
to furnishing our chief engineer with data which would guide 
him in making the most economical form designs possible. It 
was a simple matter for me in laying out the code for three jobs 
to subdivide the form work symbols by adding fourth letters, 
and get the cost and quantities of posts, joists, mud sills, panels 
and beam sides, etc., all reported separately and their unit 
costs worked out, so that we were able to compile data showing 
how much each post, joist, etc., cost to erect. 



SYSTEMS OF COST KEEPING 503 

Although the system may at first sight seem to be complicated 
and costly, it is not so in fact. The work in our office is all done 
by my two assistants, who work with adding machines, and I give 
not more than one-fifth of my own time to supervising and direct- 
ing it. Our total pay rolls in the summer-time sometimes amount 
to as much as $18,000 a week, and this is all handled by these two 
men without difficulty, and leaves my chief assistant time to 
visit the jobs occasionally. In the field we spend little more than 
other contractors do on timekeeping. On a job having a pay roll 
of $1,500 to $2,000 a week, one timekeeper at $15 would give his 
whole time to timekeeping. All the materials would be looked 
after by a material clerk at about the same wage. Larger and 
smaller jobs would have different organizations as their needs 
required. 

I think the difficulties which are hardest to overcome and which 
need the most careful attention are: first, getting the timekeepers 
interested enough to study their work and divide the time 
rightly; second, seeing that quantities are reported for every 
item and reported correctly; and, third, having the figures 
handled in the office by men that understand them. My assist- 
ants have been picked not from the ranks of bookkeepers but 
from our own timekeepers. I am sure all the time that they 
know the meaning of the figures they are handling and can 
detect errors as they occur. 

For the establishment and conduct of a proper cost accounting 
system on construction work, the chief requisites do not seem 
to be so much a high degree of technical skill and expert knowl- 
edge as much as a common-sense view of the problem to be 
tackled and patient persistence in working out the details, 
refusing to be halted by any obstacles. It is easy to pay large 
fees to experts to install a system. It is not so easy to plug 
away week after week working out the system, patiently in- 
structing men, detecting errors, correcting them, overcoming 
opposition, and getting results. 

The Cost Accounting System of Construction Division, IT. S. 
Army. — Mr. C. W. Pinkerton, formerly cost engineer at Camp 
Beauregard, La., has written the following in Engineering and 
Contracting, May 21, 1919. 

The basis of the cost accounting system used by the Con- 
struction Division of the United States Army during the re- 
cent period of rapid building of cantonments, depots, hos- 



504 CONSTRUCTION COST KEEPING AND MANAGEMENT 



pitals, terminals, etc., is the foreman's daily report blank, 
Fig. 235. The foreman fills out only the left half of the card, 
which is used for all labor and team service. 

When this report reaches the office it goes first to the pay- 
roll clerk, who makes his entries therefrom preparatory to 
making up the pay roll. The report then goes to the cost de- 
partment. After it has been passed by the pay-roll clerk to 



DATE 





_.»i„ 




RUILDINC ACCOUNT NUMBER 


NAMF 








FOREMAN 


'SS^S^'^^&fSSP** Joh No. 


BUILDIHC ACCOUNT NUMBER _ DATF„ ... m 




„„„. 


m 




LABOR DISTRIBUTION 


„.„ 


..„ 


.„„„., 








- 


U 


I 

i 

I 


FOUNDATION .POSTS W»d 
















FRAMIKC LUMBER 2 In- Thick and Over 








SHEATHING Include Siding, Ptoorioi, Roof ShuOunf 
















SCREENS 
















SETTING FRAMES Do.,, .nd Wind™. 
















SETTING DOORS 
















SETTING SASH 
















WALL BOARD 








ROOFINC Peered 
















CONCRETE 
















INTERIOR TRIM 
















METAL LATH 
















STUCCO 
















































EXCAVATING 












i 


















CONCRETE FORMS 














M 


CONCRETE MIXING A PLACING 
















CONCRETE REINP0RC1NC 
















CEMENT FINISH 
















— 


BRICKWORK 
















TILE WORK 
















STRUCTURAL STEEL 
















CORRUGATED IRON 








t 
























ROADS 
















WATER 








SEWERS 
















LIGHTING 
















PLUMBING 
















HEAT1NC 








tCTU. 


1 












.ENTERED ON PAV ROLL BY 


ENTERED ON COST- SHEET BY 


THIS HAL? OP CARD TO BE FILED BY COST CLERK 01 COST ENGINEER'S! OTWKt 
WRITE m BIAMK SPACES 0TH(R ITEMS OP WOES 



















Fig. 235. — The foreman's daily report blank. 

the cost department, no change can be made on the pay roll 
without having a corresponding change on the foreman's report 
involved. 

The cost department examines the report to see that all 
needed information is given thereon. Reports having insufficient 
details are sent back to the foremen for correction. 

From the details furnished by the foremen, the cost clerks 
make the extensions on the right half of the card and carry the 
totals to their own books. The form of these books is left to 



SYSTEMS OF COST KEEPING 



505 



the Cost Engineer on each job to design for himself, and as the 
writer has seen none which he does not consider too cumbersome 
none is reproduced herewith. A simple recapitulation sheet 
in a loose leaf binder will serve the purpose. 

Only one job can be reported on one card and each foreman 
is required to fill out as many cards as the number of jobs on 
which he works during the day. 

At the same time the building inspector turns in daily the 
form reproduced as Fig. 236, showing the percentage of work 
done on various items in the buildings under his charge. The 
card provides places in which he may check progress under 



NaMF 


S 


CA 


RD 




J < 


IK 


u; 




•T 


OR ALL TVPICAL CANTONMENT BUILDINGS 
CAPO TOP. t*CII KIND OF II/ILDIXC DATE _ 191 . 




""" " """ U1I.AIO.-. ».»t 








LABOR DISTRIBUTION 


lll.DG SO. 


U1.DC NO 


CLOG NO, 


IILD'G NO. 


1'LDG NO. 


DLD'C NO 


DLD'G NO 


JLDC NO. 


HLDGNO. 


|:LD"C NOi 


; 


; 


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KM-XIIVriON POSTS w„.[ 


















































































IU\MI\C I.UMlICK Jin. ™„k inn O.er 


















































































SHEATHIKC t.Hui« !.£«, Fbwi*. Red Sk.»lli 


















































































SCREENS 


















































































SITTING FRAME D~-, .nn \V-do», 


















































































SITTING DOORS 


















































































SFTTIVi; S\SII 


















































































IV ML DOVI1D 


















































































ROOTING Prrraml 


















































































CONCRETE 


















































































INTTRIOR TRIM 


















































































\IFT\L IATII 


















































































STVCCO 


















































































EXCAVATING 


















































































THE BUILD1NCS LISTED HERE ARE COMPLETED IN ALL I 


TEMS 



































































































Fig. 236. — Form used by inspector for reporting on work done on various items in 
building under his charge. Actual size of form: 4^j in. X 8^ in- 



columns headed 34> M> M> fH) or instead of checking these he 
may give the percentage done in figures. Only one kind of 
building may be reported on one card. 

Quantities are determined by the engineers on the job. The 
quantity of work accomplished or completed during the current 
week and the total to date may be obtained by two methods: 
(a) the determination of the total quantities to date and the 
subtraction therefrom of the quantities reported to date as of 
the close of the previous week; and (6) the determination of the 
quantities of work from the point or line of completion as of the 
close of the previous week and the addition thereto of the quan- 
tities previously reported. The first method is generally prefer- 



506 CONSTRUCTION COST KEEPING AND MANAGEMENT 

able as it serves as a check against the reporting of excess quan- 
tities. 

Upon the completion of a project the engineers prepare a 
report showing the special conditions of labor, weather and 
all particular difficulties encountered. In reporting labor unit 
costs, any which are particularly low or high are commented 
upon. 

From the summaries of data obtained the foremen's reports 
together with the estimates and the progress reports of the 
building inspectors, the cost engineer prepares on the form 
shown as Fig. 237 his weekly report of labor unit costs. 



NAME 


IU 




un 1TLABOR costshL this card must be sent to Washington 


'EEKLY-c »,.. 


LABOR DISTRIBUTION 


:™»a 


«*«Sj» 


°"E" 


SET 


"ELS' 


"rit 


"l""l" 


°€r* 


FOUNDATION POSTS Wood 






















FRAMING LUMBER 2 In. Tfaick and Over 






















^™S.dir,g r Florin,. Root Sh-ath 






















SCREENS 






















SETTING FRAMES Doom and Windows 






















SETTING DOORS 






















SETTING SASH 






















WALL BOARD 






















ROOFING" Prepared 






















CONCRETE 






















INTERIOR TRIM 






















METAL LATH 






















STUCCO 






















FXCAVAT1NG 























Fig. 237. — Form for weekly report of cost engineer on labor unit costs. Actual 
size of form: 4^ in. X 8}£ in. 



The forms (Figs. 236 and 237) are used for all typical canton- 
ment buildings. Two similar forms are used for general con- 
struction work in addition to the above and are provided with 
the classification shown in the center of the right half of the 
former (Fig. 235). These last cards are used only where large 
quantities of the work described by the classifications thereon 
are involved. 

An effort was made to adopt a system which would not put 
a burden on the field forces and which would not require great 
expense for an organization. It was felt that on each project 
the field forces should consist of a cost engineer, a quantity 



SYSTEMS OF COST KEEPING 507 

estimator, and a cost clerk. The duties of the cost engineer 
were to: 

(a) Have general oversight of the field and of the unit labor 
cost program, 

(6) Instruct the foreman in the filling out of form 1901, 

(c) Analyze the unit labor costs, 

(d) Determine the causes for excessive costs, and 

(e) Recommend to the Construction Quartermaster the rem- 
edy therefor. 

In addition to this, the cost engineer was given a certain 
authority over timekeepers, material checkers, invoice clerks 
and purchasing department employes to see that the data 
needed by him were promptly and accurately furnished. He 
was allowed to use the timekeepers and time checkers for the 
purpose of returning for correction any reports on which an 
insufficient or questionable description of work appears. 

The classification of buildings worked out by the Cost Ac- 
counting Division for comparison of costs of buildings of the 
same type is being adopted by a number of contractors who 
have seen it, with, of course, such changes as bring it within 
the needs of each contractor. This classification consists of 
a series of primary numbers and another series of secondary 
numbers. 

The primary classification, series 200 and upwards, is used 
to show the item of construction on which it is desired to keep 
costs. Each primary account number represents the same item 
of work or subdivision of the project, wherever used, regardless of 
appropriation, location, or contract. 

The second classification, series 1 to 150 inclusive, is used to 
show the various kinds of work done under the items of the pri- 
mary classification. Each secondary account number repre- 
sents the same kind or character of work regardless of other 
details. 

The primary classification must always be used in connection 
with the secondary classification. For example, if the building 
being constructed carries the primary classification account No. 
201 and it is desired to charge plumbing (secondary classification 
No. 18) against that building, the cost distribution would be 
201-18. 



508 CONSTRUCTION COST KEEPING AND MANAGEMENT 

The classification follows: 

Type or Class of Construction 

Primary 
Account 
Number 

201 66 men barracks, 30 by 60 ft. 

202 Two-story buildings, 20 ft. wide. 

203 Two-story buildings, 30 ft. wide. 

204 Two-story buildings, 43 ft. wide. 

206 Types G. & H. officers' quarters. 

207 Lavatories. 

208 Latrines. 

209 Showers. 

210 Post office. 

211 Detention huts. 

212 Assembly halls. 

213 Storehouses, 60 ft. wide. 

214 Two-story warehouse, 72 by 116 ft. 

215 Magazines. 

216 Shops, 36 ft. wide. 

217 Black wmiths shops. 

218 Closed stables, 24 ft. wide. 

219 Open stables, 24 ft. wide. 

220 Open sheds, 29 ft. wide. 

221 Hay sheds. 

222 Watering troughs. 

223 Feed troughs. 
, 224 Hay racks. 

225 Loading platforms. 

226 Dipping tanks. 

227 Fences and gates. 

228 Flooring and framing for tents. 

231 65 ft. wide garages. 

232 Fire stations. 

233 Grain storage elevator. 

234 Motor and service station and repair shops. 

235 Repair shops, 60 ft. wide. 

236 Lecture halls, 120 by 167 ft. 

237 Drill halls, 200 by 300 ft. 
239 Coffee roasting plant. 
246 Delousing plant. 

401 Ice and cold storage plants. 

402 Laundry buildings. 

403 Bakery buildings. 

404 Incinerators. 

405 Reservation fences. 
502 Library theater. 

701 Hospital building (one story frame). 
703 All two-story masonry and frame. 



SYSTEMS OF COST KEEPING 509 

704 All other buildings. 

705 Connecting corridors. 
816 Well houses. 

1035 Power house. 
1506 Coal trestle. 

Secondary Classification to cover details of construction used 
in connection with the Primary Classification. 

Secondary 

Account 

Number 

Details 
3 Excavation and backfill. 
7a Foundations, masonry, and 
7b Foundations, steel (these accounts to be used only if building is very 

large or will house heavy machinery and equipment). 
9 Concrete (can be used for concrete piers, floors, etc., or when large 
quantities of concrete are poured. State why account is used, i.e., 
Concrete piers, and floors, concrete walls, etc.). 
15 Carpentry. 

a — Foundation posts (wood). 

b — Framing and erecting lumber (2 in. thick and over). 

c — Sheathing (including siding, flooring, roof sheath). 

d — Setting frames for doors and windows. 

e — Setting doors. 

f — Setting sash. 

g — Interior trim. 

37 Screening. 
53 Wallboard. 

42 Roofing (state kind). 

17 Painting. 

18 Plumbing. 

19 Ranges and kitchen equipment. 

20 Heating, stoves. 
23 Sheet metal work. 

25 Elastic fighting, interior. 

33 Tile (used for walls, partitions, etc.). 

34 Structural steel (used only in large structural steel construction). 

38 Permanent machinery or equipment. 

a — Pumps and piping. 

b — Engines. 

d — Boiler house equipment. 

f — Switchboard. 

k — Miscellaneous equipment or machinery. 

39 Fire protection. 

a — Fire apparatus, 
b — Sprinkler system. 
c — Fire alarm system. 



510 CONSTRUCTION COST KEEPING AND MANAGEMENT 



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o 

5 

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as 

o 

i 
I 








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41 Miscellaneous iron work (does not in- 
clude reinforcing for concrete). 

65b Doors, steel or fire doors. 

69 Foundations for machinery (cost to be 
collected under this account only when 
extra foundations are placed to accom- 
modate machinery and should not be 
confused with 7a and 7b). 

89a Tanks, steel (to be used for gasoline pump 
station). 

The weekly total cost report is pre- 
pared on the form illustrated as Fig. 
238. In this form, under column for 
accounts is typewritten the list of 
needed account numbers in accordance 
with the classification. Opposite the 
number the description of the work and 
the number of building with dimensions 
should be placed, as 

"702— Two Story Frame Hospitals 
(6) — "x— "— "— " 

Below this line the proper sub-heading 
or secondary numbers, as 

3 Excavation. 
15b Framing. 
15c Sheathing. 
15e Setting doors. 
53 Wallboard. 
18 Plumbing, etc. 



Transfer the distribution of pay rolls 
under labor column, and materials and 
supplies under material and supplies 
column on the cost forms. The five 
totals as shown at - end of cost account- 
ing classification schedule as furnished 
by the cost department are self- 
explanatory. 

A. Total direct cost is totals of form (Fig. 

238). 

B. Total indirect cost is totals of form (Fig. 

239) transferred. 



SYSTEMS OF COST KEEPING 



511 



1x 



z i 

O 3 



> «« 
O o 









! 



I 



512 CONSTRUCTION COST KEEPING AND MA NAGEMENT 

C. Total cost is totals of direct and indirect cost. 

D. Unpaid wages. This shall be deducted from labor and total columns. 

E. And the balance shall equal E, or total vouchers paid. This must 

check with total disbursements as of pay roll closing date. 

The material entries are for totals paid during the week, 
not for the value of the materials used in connection with the 
labor entries. 

The revised estimate when properly kept up on the basis 
of costs to date is one of the most valuable features of the system. 
Immediately upon receiving an authorization for new work the 
constructing quartermaster has an estimate of work made and 
carried out in this column in the detail required for cost dis- 
tribution, showing quantities and unit estimated costs. Further, 
as the work progresses, and the cost of the work has not been 
anticipated, a revised estimate should be made to supplant the 
original. In this way, knowing the percentage of completion, 
the constructing quartermaster has before him a detailed 
statement of his estimates. 

No unit costs are required to be given weekly on small quanti- 
ties such as concrete for foundations of frame structures, nor on 
overhead, prorate and indirect charges. Labor unit costs are 
required on those items of direct classification which are listed 
on the form (Fig. 238), and which items have quantities suf- 
ficiently large to justify the work involved. No labor unit costs 
are shown on such items as plumbing, lighting or heating while 
the job is in progress. 

Chief among the unusual features of the system is the great 
number of items included under overhead, prorate and indirect 
charges, among which may be mentioned the unloading, loading 
and hauling of practically all materials and the cost of all tempo- 
rary buildings, structures and roads, even when such temporary 
construction could be directly charged to one item of the work. 
For example: A carload of material is received, unloaded 
and piled temporarily at the unloading plant; later it is hauled 
to a central storage yard; a part of it is then transferred to another 
storage yard or sub-depot from which point it is hauled to the 
proposed site of the job on which it is to be used. All expenses 
herein incurred, including the delivery at the site of the job, are 
charged to the overhead account and not to the job on which the 
material is to be used. Any expense incurred in connection with 
the distribution of plant and materials after delivery has been 



SYSTEMS OF COST KEEPING 513 

made to the site of the job on which they are to be used is charged 
directly to the operation for which the materials are intended. 
An example of this is the carrying of wallboard into a building 
from the place where it was unloaded from wagon or truck at the 
door, which is charged to placing wallboard in that building. 
The costs of buildings, therefore, do not, until the overhead has 
been added to the other costs, include the item which contractors 
ordinarily call teaming. 

On the other hand all expense of unloading and hauling 
materials required for the construction of pipe lines, pole lines, 
railroads, roads and like facilities is not charged as above, but is 
charged directly to the construction of the facility for which the 
material is handled. 

Unless one realizes the large number of items included under 
overhead by the government, the high percentage of the overhead 
charge in government cost reports is likely to be surprising. 
This teaming item alone involves large expenditures. At 
Camp Beauregard, La., the overhead was so high as to cause 
48% to be added to the cost of each piece of work done. This 
was not because of extravagance or carelessness, but simply 
because of the breadth of the classification. 

A complete list of the items included under overhead prorate 
and indirect charges appears on the form Fig. 239. Accounts 
152, 153, 155, 196 and 197 on this form consist only of that 
proportion of the expenses included therein, if any, which cannot 
be directly charged to accounts under direct construction cost. 

In reference to some of these items the Cost Accounting 
Manual says: 

The theoretically correct method (but which method will not be used) 
of handling all charges in connection with use of equipment, which includes 
operation, rental, ordinary repairs and general repairs, is as follows: 

All charges for operation, rental and ordinary repairs should be charged 
to accounts set up to cover these expenses. General overhauling and repairs 
should be charged to an account "Repairs to Equipment," debited with the 
rate per hour or day, which will absorb and prorate these repairs over the 
entire work. The total charges to these equipment accounts should then be 
prorated to the items directly benefitted on the basis of the actual service 
hours as shown by the daily equipment reports. However, this method 
is not considered warranted under present construction conditions and 
charges shall be handled as indicated below. 

The operation, ordinary repairs (excluding trucks) and rental (excluding 
trucks) shall be charged directly against the specific item or items of work 
benefited thereby. 
33 



514 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Major repairs and general overhauling shall be charged to items of work 
based on the probable total use of the equipment repaired. 

Against the account 197, "Team Service," there shall also be charged 
the hire, feed and care of horses used on the job and which expenses cannot 
be charged against direct item of the work. 

Trucks are hired on the various jobs under varying conditions, such as 
with or without driver and with or without gasoline, lubricants, and repair 
parts being supplied by the Constructing Quartermaster. It is therefore 
necessa^ to include operation and rental of trucks under on account. 

The maintenance and repairs to trucks shall be charged to account 196, 
as trucks are used on a variety of work and it will be difficult to charge these 
expenses against the specific items of work on- a correct basis. 

166 — Cleaning Up After Completion of Work: To this account there shall 
be charged all expenses incurred in connection with the cleaning up and 
disposing of refuse, waste material, etc., after the construction work is 
completed. 

Any expense of this nature incurred during the progress of the work shall 
be charged directly to the secondary account number responsible for the 
accumulation of such waste ..... 

No charge shall be made to this account for work done in any building 
until all the construction work in that building is finished. 

To this account there shall also be charged all expenses incurred in con- 
nection with the disposal of waste material and the building construction. 

Many of the cost engineers and contractors working for the 
government objected to this classification, the cost engineers 
because it did not follow the usual practice and the contrac- 
tors because it makes the overhead percentage seem so high. 
The further objection was raised that since the total overhead 
is eventually to be divided among all jobs worked on at the 
place where the overhead was incurred, certain items will bear a 
very unfair percentage. 

But the Cost Keeping Department felt that because of the 
many varying conditions met at the various projects it was 
impracticable to establish any exact basis of comparison of 
these expenses, and that it was essential that these expenses 
be kept as directed. A letter from the Chief of the Construc- 
tion Division to all Constructing Quartermasters said: . 

Uniform results are the only results which will be of benefit to the Con- 
struction Division as a whole, and all units and all methods of obtaining 
costs should be the same; therefore, even though the costs submitted from a 
camp or project are excellent in themselves, if they do not conform to other 
projects they will not render the service expected. For this reason the cards 
sent you, the units suggested, and the methods outlined should be followed 
throughout, in order that all results may be uniform. 



SYSTEMS OF COST KEEPING 515 

Equipment rental is carried on the pay roll. The equipment 
is checked every day and a proper record made of the work 
the different pieces of equipment are engaged on. The rentals 
are charged against the accounts in the same manner as other 
pay-roll items but idle or non-productive time of the equip- 
ment is charged to account number 155, idle equipment ac- 
count. 

It will be noticed that practically all of the details of this 
system relate only to labor costs. It was felt that, while one 
superintendent as compared with another or one project as 
compared with another project might make more or less saving 
in material, yet the difficulties of carrying the materials through 
stock accounts under existing conditions were too great to justify 
the work. The efficiency of construction work from the ad- 
ministrative viewpoint is determined by the labor unit costs. 

While the material is not carried into the unit costs during 
the progress of the work yet strict account of it is supposed 
to be kept. 

The material purchase order as placed is the basis for the 
distribution of material costs except where the material is not 
used as specified on the original purchase order. Exceptions 
to this rule may be the result of the following: 

1. The placing of purchase orders for material in excess 
or the amount required in the construction of the project. 

2. A change in plans, reducing the size of the project as a 
whole or the elimination of or reduction in size of certain parts. 

Transfers of material are handled in the usual debit and 
credit manner. 

Under ordinary conditions it is believed that carrying the 
material through the usual stock accounts is much more sat- 
isfactory than the method above outlined. 

On most construction projects more than the regular num- 
ber of working hours per day were being worked. For the 
additional time worked or overtime the rate of pay was gen- 
erally more than straight time. This means that a certain 
number of hours and a certain amount of money were being 
paid in addition to the actual number of hours worked. Bonus 
Hours were defined by the "Cost Accounting Manual" as "the 
number of hours paid for in excess of the actual number of 
hours worked, or as that number of extra hours given to workmen 
as additional compensation for work performed on other than 



516 CONSTRUCTION COST KEEPING AND MANAGEMENT 

regular working days or during hours other than those which 
constitute the regular working day." 

Two examples are given below: 

If the standard working day consists of 8 hr. and time and a 
half is allowed for overtime and 10 hr. are actually worked, the 
workman would receive pay for 11 hr. or a bonus of 1 hr. If a 
workman works 8 hr. on Sunday and time and a half is allowed 
for all Sunday work, the workman will receive pay for 12 hr. 
or a bonus of 4 hr. 

In all projects a record of bonus hours and bonus money is 
kept under each employment, that is, trade or class of labor 
and rate of pay, showing the following data for both the cur- 
rent week and the total to date: 

Rate per hour. 

Total hours paid. 

Total amount paid. 

Total hours paid without bonus. 

Total amount paid without bonus. 

Total hours paid bonus. 

Total amount paid bonus. 

Percentage of pay roll. 

Percentage of pay roll less bonus. 

The items "Percentage of Pay Roll" and "Percentage of 
Pay Roll less Bonus" refer to the bonus, which shall be com- 
puted on the basis of hours as the money bears the same re- 
lation as the hours, and the hours will be smaller figures to 
use in computation. 

The changed attitude toward the value of cost keeping is 
shown in the following paragraphs introductory to the cost 
manual : 

The importance of the keeping of cost analyses and unit costs has never 
been as generally recognized as at the present time. Never in the history 
of this Government has construction work been carried on under such 
conditions as exist today: Never has such a vast building program been 
undertaken as is now going on under the present extraordinary economic 
conditions. 

The prodigious increase in the cost of building materials and the existing 
unprecedented labor conditions emphasize the importance of cost analysis 
and the value of unit costs 

Cost reports are essential for the following purposes : 

(a) To intelligently forecast the ultimate cost of the project during the 
process of the work. 

(b) To aid in the making of estimates on future work. 



SYSTEMS OF COST KEEPING 517 

(c) To make possible such comparisons as may be desired on units, build- 
ings or projects of like nature. 

(d) To show unit labor costs during the progress of work and for the 
completed project; also to show total unit costs for all expenditures which 
include material and other charges in addition to labor, when project is 
completed. 

(e) To enable this Division to ' compile such reports with reference to 
costs as may be desired or required by the Secretary of War, any Appropria- 
tion Committee or for the permanent records of the Construction Division. 

Bridge Cost Record Used by the Illinois Highway Commission. 

The following is taken from Engineering and Contracting, Aug. 
26, 1914: 

The Illinois Highway Commission has prepared a "Bridge 
Cost Record" for use in keeping data in the field and in deter- 
mining the final cost of its bridge work which greatly facilitates 
and systematizes this work. The record is in book form and 
contains 87 pages. It is 4}-^ by 1% in. in size and has a flexible 
leather binding. Each inspector in charge of the construction 
of a bridge is given a copy of the record. In addition to keeping 
account of the quantities of materials and the costs, as outlined 
by the forms contained in the cost record, the inspector is re- 
quired to mail to the office daily a report card showing the prog- 
ress of the work. This report card is post card size. 

The upper half of the first page of the record book contains 
the form for recording general data on the particular bridge 
under construction, the following data being recorded: 



File No.. 

Name of bridge 

County 

Township 

Span Roadway. 

Type 

Inspector 

Contractor 

Time limit 



Pages 2, 3 and 4 are blank, and pages 5, 6, 7 and 8 contain the 
following set of "Instructions:" 

As soon as work starts on the bridge assigned to you, fill in the blank spaces 
on the cover of this book with ink. 



518 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Diagram. — On the first page following these instructions, draw a diagram 
of the bridge showing the abutments, wings, footings, piers, girders and rails. 
Show the north point and direction of stream flow. Use the following ab- 
breviations to denote the different parts of the structure: 

N, S, E and W = north, south, east and west. 

A = abutment. 

W = wing. 

f = footing. 

P = pier; PI = pier No. 1, etc. 

S = span; Si = span No. 1, etc. 

F = floor; 1 = floor span No .1, etc. 

G = girder. 

R = rail. 

By combining those abbreviations, each of the various parts of the bridge 
may be indicated as NAf = north abutment footing; NG1 = north girder 
span No. 1, etc. 

The above system of abbreviations may be extended or diminished to 
suit the bridge in question and is to be used in the labor and material records 
for the purpose of designating the part of the structure on which the work is 
done. 

Labor Record. — Under "Schedule of wages" at the bottom of the first 
page of the labor record, make a schedule showing the rate of pay per hour 
received by the various men employed on the work such as a = foreman 
at 60 cts. per hour; b = laborers at 25 cts. per hour; c = carpenters at 
40 cts. per hour; etc. If the contractor pays the board of the men in addi- 
tion to the daily wage, the cost of board to the men should be included in the 
rate of pay per hour. The daily labor record should show the part or parts 
of the work under way, the number of hours at each rate of pay and the 
total labor cost. The foreman's time should be distributed each day among 
the various items in proportion to the labor. For instance, if the schedule 
of pay is as given above and five laborers work 10 hr. each in excavating pier 
No. 1; three laborers work 10 hr. each driving sheet piles for pier No. 2, and 
two carpenters work 10 hr. each building forms for the south abutment, the 
day's record would be as follows: Opposite the item of "Dry" or "Wet 
excavation," as the case may be, would appear, PI, 50 b, 5 a = $15.50. 
Opposite "Driving sheet piling" would appear P2, 30 b, 3 a = $9.30; and 
opposite "Building forms" would appear SA, 20 c, 2 a = $9.20. 

Materials. — -Under "Schedule for hauling" at the bottom of the first page 
of the "Material Record," make a schedule showing the rate per day or per 
unit of material for team hauling, using letters x, y, z, etc., to avoid confusion 
with the labor schedule. For instance, if the hauling is done by the day 
at $4.50 for a 10-hr. day, at the bottom of the page would appear x — 
45 cts. per hour per team. Then if on a given day three teams haul gravel 
for 10 hr. and deliver 3 yd. each, one team hauls cement 10 hr. and delivers 
30 barrels; then in the day's record for hauling would appear opposite. 
"Cement Delivered" 30, 10a; = 14.50, and opposite "Gravel delivered" 9, 
30x = $13.50. 

If the hauling is done at a certain rate per unit of material, as, for in- 
stance, 50 cts. per cubic yard for gravel, at the bottom of the page should 



SYSTEMS OF COST KEEPING 519 

appear "Gravel hauled at 50 cts. per cubic yard," and it is not necessary to 
record for the day anything more than the number of units hauled and the 
total cost for the day. 

If gravel, stone or sand is purchased or hauled by the ton, the equivalent 
number of cubic yards may be computed on the basis of 1 cu. yd. of 
gravel weighing 3,000 lb.; 1 cu. yd. of sand weighing 2,750 lb.; 1 cu. yd. of 
broken stone weighing 2,500 lb. 

On a succeeding sheet under "Schedule" give the cost of materials at 
point where team haul begins. 

Determine each day the amount of concrete placed by measurement in 
the forms and in the proper space record this amount and by abbreviations 
where used. 

Record the amount of cement used each day and check against concrete 
placed, and amount required by the specifications for the material being used. 

Falsework lumber includes piles or posts, bracing, wedges, beams and 
stringers. The lumber for the floor belongs under "Form lumber." If 
piling is used for the falsework, add a sufficient number of board feet to the 
rest of the falsework lumber to make up for the cost of the piling. 

Permanent Piles. — The "Piling Record" refers to piles used as a part 
of the permanent work and should show the original length, cut off and net 
length of each pile, and should also show the total for each abutment and 
for each pier. The total lineal feet of permanent piling left in the ground 
for the entire bridge should be given at the end of the record. 

Tests. — Record in a systematic manner all gravel and sand tests, tests 
on foundation and any other tests which you may make. 

Instructions. — Record all suggestions given to the foreman or received 
from your division engineer. 

Material Data. — The material data sheet is inserted to show in a concise 
form all data on materials. The cost should be for units of material. The 
column, "Name of Company Furnishing Same," should show the brand of 
cement and the name and address of the company furnishing stone, sand 
or gravel, and steel. For the other items, it will lbe sufficient to give the 
hauling station. Under "Remarks" give the hauing station or stations 
of the cement, stone, etc. 

If the gravel is used from a local pit, make it a point to visit the pit at 
some convenient time and give a description of the same on the preceding 
blank page, giving location, name of owner, a rough estimate of the available 
gravel in pit, etc. 

Detail Cost Summary. — As soon as the work is finished, with the exception 
of removing the falsework, fill out the detail cost sheets at the end of the 
bopk with pencil. Each item of cost should include all items that may 
properly be included thereunder, as, for instance, cost of pumping during 
excavation should include cost of rigging of pump, fuel, etc., and cost of 
driving piling should include cost of rigging up driver, removing same, etc. 

The item, "Labor Removing Falsework," will have to be estimated in 
most cases, as you will probably not be on the job when this work is done. 

The item, "Incidentals," should include only such items as cannot 
properly be applied to the detail work items. Incidentals, extras, traveling 
expenses, etc., are to be distributed among the cost per cubic yard items as 



520 CONSTRUCTION COST KEEPING AND MANAGEMENT 

may seem most appropriate, giving in the detail items an indication of the 
distribution. 

The salvage on lumber and falsework is an item subject to considerable 
variation. It depends mostly upon the dimensions and quality of the 
lumber and the complication of the form work. If the contractor has work 
on which the lumber will be used several times, this should be taken into 
consideration in figuring salvage. For instance, if the form lumber can be 
used on three different jobs, the salvage would be 67% less the value of the 
lumber wasted. If, however, the contractor buys new lumber and sells it 
when the work is finished, the salvage would be the selling price of the lumber 
which might not be more than 15%. 



Date 
















































































































































Total 

























Pig. 240.- — Left-hand page of form for labor record. 

In summarizing the cost per cubic yard of concrete, each item in the 
summary should include all of the detail items that properly belong in the 
summary item. For instance, forms per cubic yard of concrete should 
include lumber, nails, wire, etc., and excavation should include cost of sheet 
piling, excavation, pumping, etc. 

Disposal of Records. — When your cost record is complete, mail the book 
together with the plans, to your division engineer. He will check the same 
and return the book to you for corrections if any are necessary, and you 
should then letter with ink the four detailed cost sheets. The other data 
may be in pencil, but do not use a softer pencil than a 4H. After inking 
on the cost sheets, send the book to the office. Have this book with you 



SYSTEMS OF COST KEEPING 



521 



on the job at all times so that your division engineer may examine it when 
he comes to visit the work. 

If in doubt about anything, ask your division engineer. 

Pages 9 and 10 are blank, and on page 11 there is the following 



ITEM 


DATE 191 


Total 

for 
Week 


Total 
Deliv'd 
















Concrete 
placed cu. yds. 




















Cement used 
bbls. 




















Cement 
del. bbls. 




















Stone 

del. cu. yds. 




















Sand 

del. cu. yds. 




















Gravel 
del. cu. yds. 




















Steel 
del. lbs. 




















Form lumber 
del. M ft. B. M. 




















Piling 
del. No. 




















Sheet piling 
del. M ft. B. M. 




















Falsework timber 
del. M ft. B. M. . 








































Schedule for hauling 













Fig. 241. — Form for material record. 



heading: "Plan of Bridge, Showing Abbreviations to Be Used on 
Labor Sheets," with space below for recording these data. 
Pages 12 and 13, to 34 and 35, inclusive, which face each other 
contain duplicate forms for making out the "Labor Record." 
The left-hand page contains the data shown in Fig. 240. The 



522 CONSTRUCTION COST KEEPING AND MANAGEMENT 

right-hand page is ruled in a similar manner, the last column of 
which has the heading "Total. " 

Pages 36 to 47, inclusive, contain duplicate forms for recording 
the "Material Record." Each form fills one page and is made 
up as shown in Fig. 241. 

The forms for keeping the "Piling Record" data are given 
on pages 50, 51, 52 and 53. Each page is divided into four 
columns by vertical lines, the heading for these columns being 



Material 


Cost 


Name of 

Company 

Furnishing 

Same 


At R. R. 

Station 


At 
Bridge 


































Steel 








Piling 









































































Fig. 242. — Form for material data. 

"Pile No.," "Length," "Cut. Off," and "Net Length." Each 
page contains space for 25 pile records. 

From page 54 to page 74, inclusive, there are given blank 
spaces for recording such items as: Bearing Tests on Foundation 
(3 pages); Gravel and Sand Tests (3 pages); Suggestions Given 
to Foreman (4 pages, ruled horizontally) ; Instruction from Divi- 
sion Engineer (4 pages, ruled horizontally); and 7 blank pages. 

On page 75 there is given a "Material Data" fo^m which is 
made up as shown in Fig. 242. 

On pages 76, 77, 78 and 79 there is given a form for determining 
the "Detail Cost of Bridge Work — Actual Cost." In the cost 



SYSTEMS OF COST KEEPING 523 



Cement bbls. @ J per bbl. = $. 

Hauling cement miles @ $ per bbl. = ?. 

Crushed stone cu. yds. @ |... .per cu. yd. = *. 

Hauling crushed stone .■ miles @ $ per cu. yd. = ). 

Sand cu. yds. @ ?.. per cu. yd. = $. 

\Kashlng Band , cu. yds. <g> | per cu. yd. = *. 

Hauling sand miles @ $ per cu. yd. = $. 

Gravel cu. yds. @ % per cu. yd. = J. 

Washing gravel cu. yds. @ % per cu. yd. = $. 

Screening gravel cu. yds. @ $ per cu. yd. = $. 

Hauling gravel miles @ $ ^ . ..per cu. yd. = J. 

Form lumber M. ft. B. M. @ % per M. = %. 

Falsework lumber M. ft. B. M. @ % per M. = $ . 

Wire, nails, etc lbs. @ t per cwt. = $. 

Hauling form lumber miles <§) $ ...per M. = $. 

Hauling falsework lumber miles @ $ per M. = $. 

Reinforcing steel •. lbs. @ $ .per cwt. = %. 

Hauling steel miles @ t per cwt. = $. 

Rockers lbs. @ $ , per cwt. = J. 

Asphalt gals. @ % per gal. = %. 

Hauling rockers and asphalt miles @ % per day = $. 

round piles at bridge site ft. long @ % per pile = % . . 

Cost of driving piling lin. ft. @ % per linear foot = J.. 

Sheet piling M. ft. B. M. @ * per M. = %., 

Hauling sheet piling miles @ % per M. = $.. 

Cost of driving M. ft. B. M. of sheet piling = %. 

Cost of removing...., M. ft. B. M. of sheet piling = $. 

Labor on cu. yds. dry earth exc hrs. @ % per cu. yd. = $. 

Labor on cu. yds. wet earth exc hrs. @ $ ,per cu. yd. = $.. 

Cost of pumping during exc hrs. @ $ per hr. = $. . 

Cost of pumping during cone hrs. @ $ per hr. = %.. 

Labor building forms hrs. @ $ per hr. = J.. 

Labor building falsework hrs. @ % per hr. = $.. 

Labor bending and placing steel lbs. @ % per cwt. = %.. 

Labor mixing and placing concrete hrs. <5> % per hr. = J.. 

Labor removing forms hrs. @ J per hr. = $.. 

Labor removing falsework hrs. @ t ..per hr. = $.. 

Traveling expenses = f . , 

Extras =$.. 

Extras = J . . 

Incidentals = % . . 



Total. 

Salvage on lumber and falsework = $. 

Total net cost to contractor = $ . 

Total amount due contractor = $ . 

Profit or loss ' = $. 



Fig. 243. — Form for detail cost of bridge work — actual cost. 



524 CONSTRUCTION COST KEEPING AND MANAGEMENT 

record book the item and the quantity are on the left-hand page 
and the unit and total cost on the right-hand page. This form 
is made up as shown in Fig. 243. 



Summation of cost per cu. yd. for placing cu. yds. of concrete and pounds of steel. 

This does not include cost of round piling, expansion rockers, or removing old bridge. 

Cost per cu. yd. of concrete. 

Cement ...bbls. <§> $ .per bbl. = $ 

Stone cu. yds. @ $ per cu. yd. = J 

Sand cu. yds. @ $ per cu. yd. — $ 

Gravel cu. yds. @ $ per cu. yd. = $ 

Labor on forms per cu. yd. of concrete = $ 

Form materials per cu. yd. of concrete = $ 

Labor on falsework per cu. yd. of concrete = $ 

Falsework materials per cu. yd. of concrete = $ 

Cost of steel in place per cu, yd. of concrete = $ 

Cost of mixing and placing concrete = $ 

Cost of excavation per cu. yd. of concrete. = $ 

Total = $ 

Cost of exc. per cu. yd. of substr. concrete = $ 

Cost of falsework per cu. yd. of superstr. cone .' = $ 

Cost of removing old bridge = $ 

(Give brief description of old bridge.) 



Fig. 244. — Form for cost per cubic yard. 

Pages 80 and 81 contain the "Cost Per Cubic Yard" form. 
This form occupies both the left-hand and the right-hand pages, 
a small space being left at the bottom of the pages for a brief 
description of the old bridge. This form is shown in Fig. 244. 



Concrete shown on plans ..Superstr cu. yds. Substr cu. yds. 

Reinforcing steel shown on plans Superstr lbs. Substr lbs. 

Concrete actually used Superstr cu. yds. Substr cu. yds. 

Reinforcing steel actually used Superstr lbs. Substr lbs. 

Extra concrete authorized in superstr 19 cu. yds. 

Extra concrete authorized in substr 19 cu. yds. 

Reduction in -concrete authorized in superstr 19 cu. yds. 

Reduction in concrete authorized in substr 19 cu. yds. 

Piling authorized 19 lin. it. 



Fig. 245. — Form for summary of quantities. 

On the upper half of pages 82 and 83, extending across both 
pages, there is given the form for the "Summary of Quantities." 
This form is shown in Fig. 245. 



SYSTEMS OF COST KEEPING 525 

The lower half of pages 82 and 83 contain the form for "Pay- 
ments Recommended." This form extends across both pages 
and is made up as shown in Fig. 246. 

Pages 84, 85, 86 and 87 are blank pages. 

Daily Report Form. — The form used by the inspectors in 
making out their daily report is shown in Fig. 247. The form is 
post card size (3J4 by 5% in.), and contains on the opposite 
side of the commission address and a space for a 1-ct. stamp. 

Cost Recording Forms Used for Street and Sewer Work, 
Engineering Department, Spokane, Wash. — The following notes 
are : taken from Engi?ieeriny and Contracting, Nov. 22, 1911. 

The accompanying forms show the manner of recording labor 
and material consumed in street improvement and sewer con- 
struction in Spokane, Wash. These forms have been worked up 
by the city engineering departments, Morton Macartney, city 
engineer. Mr. Macartney describes the forms (Figs. 298-251) 
and their purpose as follows: 

There are four forms, namely: Two inspector's daily report 
forms, and two monthly record forms, one each covering street 
work and one each covering sewer work. The inspector's reports 
are made out daily by the inspectors on the work and are turned 
in to the office either the night of the day reported, or the first 
thing the following morning. It will be noted that they go into 
detail to considerable extent, but it is found that with a printed 
form of this kind the inspector has no difficulty in segregating the 
work and putting the proper entries on same. The forms are 
tabulated and arranged so that the inspector does as little writing 
as possible. This accounts somewhat for their size. 

These daily reports are turned in to a clerk in the department, 
who enters them upon the monthly reports. These monthly 
reports are kept, one for each improvement, and by "improve- 
ment" is meant the entire contract for a given street. These 
are turned in to the district engineers, who verify and certify to 
their correctness, and are then passed to the chief. After they 
have been corrected and tabulated, they are place in the file for 
this improvement. In this manner it has been possible to get 
very accurate and reliable cost data on work. 

There has been some difficulty in keeping the inspectors lined 
up to report accurately the items, and probably the cost data 
varies from the actual cost 5% but it is not believed that there is 
ever any variation to exceed this. The district engineers go over 



526 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Contract price superstructure Dollars ($ > 

Extras superstructure ' Dollars ($ ) 

Contract price substructure Dollars ($ ) 

cu. yds. extra concrete @ ($ ) per cu. yd Dollars ($ » ) 

lin. ft. piling @ ($ ) per lin ft Dollars ($ > 



Total.... $. 
.cu. yds. reduction in cone. @ ($...) per cu. yd ; Dollars ($. 



Net amt. due contractor Dollars ($. ) 



Fig. 246. — Form for payments recommended. 



Br 1914 




INSPECTOR'S DAILY REPORT. 


Kind of Work 


No. of 
Hrs. Work 


Coveted *«««■ 




















Pier 






Pier 
























Pier 






Pier 






Floor 










































Pier 






Pier. 






Floor 












Building False Wk 
















Hauling Material 








l 






... 1 ■ . . 


Removing Forms 








1 


Material 
on Ground 


Sand Gvl. 


Stone 


St'l 1 Bridge- 
Rods Material 




1 




| 


Total Men Work- 










" . . 1 


Con, of Work. . . . 




:...-. i. ......... 






i 





Fig. 247. — Form for inspector's daily report. 



SYSTEMS OF COST KEEPING 



527 



Fwm les. INSTRUCTIONS 

Make separate reports for Oar Tracks. 

Use Square Tarda for sidewalks and Pavements. 

Use Linear Jeot for Oorba and Oroaa Walks. 

Use Number of Sacks, when reporting Cement used. 

Private work, means anything not called for In specifications, molt U drive- 



ENGINEERING DEPARTMENT 
Daily Force Report 



Improvement. 

From __._... 

To. 



Location 

Contractor- 



Spokane, W 










.191..- 






M 

< 
09 


u 2 

« w 
a 


3 5 


« | 


ft* 




5a 
> s 
< w 

0, 




Foreman 


















Formsetter. 
Laborers. — 

Finishers 

Helpers 

Rakers.... 

Masons ... 

Engineers 

Firemen 

Teamsters... 

Teams. 

S'gl Horses 

Mixers 

St'm R'llers 
St'm Drills 

Drillers 

Blacksmith 
Powderman 
Powder 














........ 
































O 

a 

< 


3 § 
< w 


BRAND 
CEMENT 


Si 

n 

O 


PEIVATE WOEK" 


Amt. 


Sacks 
Cement 


Cemeni 


Sidewalks.— 

Curbs 

C.C'rb&Gutt'r. 
CrossWalks 






















































C'ncrt on Base 
Brick Gutt'i 
Brick P'v'g. 
Asphalt T'p 
Asph'It B'dr 
M'c'd'mT'p. 
M'c'd'mBse 



































































































Cement — Rec'd Tested on hand... 

Certified correct _ - 



..Untested on hand- 
inspector 



Fig. 248. 



528 CONSTRUCTION COST KEEPING AND MANAGEMENT 



FORM 177 


CITY OF SPOKANE 


SEWER INSPECTORS 


DAILY FORCE REPORT 


Date 191 


Tmp'mt. 


















u 

s 
o 

a 

u 
a 
Ph 


Number of Hours 










ing Back-Fill 


c 
a 

a 

% 

n 






6,o e> 
ZK2 


6 o o 


o c o 
2HZ 


1 i 

1 

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s a 


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a a 


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WORKMEN 












a a 


V. P. 


V. P. 


V. P. 


V. P. 
















































































Tirnhprmpn 














Powder man 












































Teamster and Team 
















Firemen 














Hand Thriller 
































No. Feet Drilled 




































































Inspector 

(Over) 





Fig. 249. 



SYSTEMS OF COST KEEPING 



529 







For M. H. 
No. 


For F. T. 
No. 


For C. B. at 

M. H. No 


























Nuimher of Rriclr 








Feet- of Vif'» , ifipH Pipe 








Fpp*. of Water Pipp 








T.ahorprn 


Hrs. 


Hrs 


Hrs 




Hrs 


Hrs 


Hrs. 


Mason Hplppr 


Hrs 


Hrs. 


Hrs. 


For House Connections From M,H No ro M. H. No. 
Ft Tn Vitrifipn' Pipe. 


























, 



Fig. 249a. 



34 



530 CONSTRUCTION COST KEEPING AND MANAGEMENT 







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W W £ 










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SYSTEMS OF COST KEEPING 



531 



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Inspection 
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532 CONSTRUCTION COST KEEPING AND MANAGEMENT 

the reports every day and are over their work every day, so that 
no great discrepancies could get in. In addition to this, the 
contractors are paid a lump sum for the completed improvement 
rather than unit prices for the different segregated pieces of 
work. In this way the contractors have no object in influencing 
the inspectors to change the quantities materially. There is also 
a check in the city laboratories on the amount of cement used, 
as well as preliminary estimates made before the work starts. 
In addition to the forms heretofore mentioned, which are 
strictly force account forms, all employes in this department are 
required to sign a time card, shown by Fig. 252. 



form Ira CITY OF SPOKANE-ENGINEERING DIVISION 

DAILY TIME REPORT 








Profile No. 


Improvement 


From 


To 


Hn. 






























































































































NOTE:— Time Slips must be Tilled oit properly and turned in daily. Unless complied with, no time will be allowed. 



Fig. 252. 

Cost-keeping System for Small Bridge and Culvert Jobs. — 

The following notes are taken from Engineering and Contracting, 
June 27, 1917. 

A cost-keeping system particularly well adapted to the small 
and scattered culvert and bridge jobs encountered in county 
work in Iowa is employed by J. A. Dunkel, Contractor, Webster 
City, Iowa. 

The foreman makes a daily report on labor, progres and 
materials, the blank shown in Fig. 253 being used for this purpose. 
This report shows the labor hours distributed to all the kinds of 
work done, all materials received and used, and empty sacks 
returned. The report gives a good check each day on all items, 
and permits the making of a comparison of the cost of each on 



SYSTEMS OF COST KEEPING 



533 



different jobs. The foremen on the different jobs are furnished 
the labor costs for all jobs each month and they knowing what 



•en*« 








DAILY REPORT 




















L 




Sitt 




NAME 


| 


A 


- » 

s3 


| 


|. 


I 


i 


la 


\ : 


I 
So 


2 ':- 


[l 


9. 


1 

II 


1| 


;i 


-s 


11 


|| 


?l 


5 










" 


































































































































































































































































































































1 


































1 I 1 




































1 1 1 1 
































i i ! i 














l\ 


»| 


11 


II 


5? 




5 s 

; 3i 




P 


a i 1 1 1 




ill!! 


= 1 










1 




J. A. OUNKEL. Contractor 



Fig. 253. — Form for foreman's daily labor, progress and material report. Actual 
size of blank 7% X 9% in- 





J. A. DUNKEL 

GENERAL CONTRACTOR 
H'KUSTER CITY, IOWA 

DAILY BRIDGE Mb HAULING & EXPENSE RECORD 






LOAD OF FROM 


TO | WEIGHT |«"-K 


„«s 


ARTICLE 


AMOUNT 


WHERE BOUGHT 














GAS 




















OIL 




















OKUSE 




















COHN 


















HAT 










i 






OATS 


















ST.AW 




















PCPAins 


























































- 


























TOTAL HPENSE FO« OAT 




















TOTAL CARKIID F0PWA.0 






1 










TOTAL IXPtKSE TO DATt 


TICKETS MUST BE 4TTACKE0 FOR ALL EXPENSE INCURRED 
REMARKS-CAUSE OF OE(.AY."ETC. 



Fig. 254. — Daily hauling and expense record. Actual size 7J4 X &A in. 

the other men are doing they are supplied with an incentive to 
reduce their own costs when possible. 



534 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Bills for materials and supplies, also duplicates of material 
orders are attached to each daily report. As the jobs are small 
Mr. Dunkel finds that it works very satisfactorily for teamsters 
and truck drivers to make their own reports. They keep an 
account of all expenses and attach bills for all items to their 
report. The blank used for this purpose is illustrated as Fig. 
254. 



J. A. Dunkel, Contractor 

WEBSTER CITY, IOWA 

Date 191.. 

I have today purchased and received from 






HAY 




lbs. 








STRAW 




lbs. 








CORN 


bu. 


lbs. 
































































.Teamst 




Ticket 0. K. 








>cen 
We 






igh Tickets Must Be Attached 



Fig. 255. — Purchase ticket. Actual size 5M X 3^ in. 

The form employed for purchases is shown as Fig. 255. Previ- 
ous to the use of this ticket it was found that many small items 
of feed, etc., were not turned in at the time the purchase was 
made. This caused trouble as bills sometimes turned up months 
afterward. Under the present system when anything is pur- 
chased a copy of the ticket is given as a receipt and another copy 
is attached to the teamster's report. The use of this ticket makes 
considerable saving each month in the purchases. 



SYSTEMS OF COST KEEPING 



535 



As the work is in the country with sometimes five moves per 
month, Mr. Dunkel uses wagon camps, one for cooking and 
dining room and one for sleeping quarters. The men are paid 
on the hourly basis with deductions for meals. The boarding 
account is kept separate and is checked up each month so that 
the contractor knows exactly how he stands. 



J. A. DUNKEL, Contractor 

WEBSTER CITY. IOWA 
Date IM- 
MATERIAL ORDER 

JOB NO. 

Deliver the following materials or supplies to 

; Teamster 

and charge same to the account of J. A. Dunkel 




Fig. 256. — Material order. Actual size 8 X 3^ in. 

Accounting and Cost Methods for Contractors. 1 — There 
are two ideas extant regarding the keeping of records by con- 
tractors. The one is put forth by a class of accountants who 
are bookkeepers and nothing else. They regard any work done 
by men who are not trained in bookkeeping to be an unwar- 
ranted infringement on their rights, and claim no one should 
attempt to make records of a financial transaction except a man 
of experience in ordinary accounting methods. The other idea 
regarding the keeping of accounts on contracting jobs is put 
forth by men of practical experience, who hold that every man 
on the job who is in a responsible position and can write, should 
send in a daily record of his work, even if he does not know 
how to keep books. 

x Emest McCullough in Engineering and Contracting, Sept. 1, 8, 15, 22, 
1909. 



536 CONSTRUCTION COST KEEPING AND MANAGEMENT 

One thing exists in common between the warring factions, 
and that is that forms are required. Of the two, the bookkeeper 
gets out the most involved. The man without experience in 
account-keeping gets out forms containing, as a rule, too much 
detail, but his forms, at any rate, have the merit of being under- 
standable by the average man. Unfortunately, in these days of 
vertical files and card indexes and business men's magazines 
and industrial literature generally, a great many amateur form- 
makers have been working. The preparation of a set of forms 
to give a man all the information he requires for his business, 
is not a matter of engaging a form-maker for a few days or 
hours to turn out a system full fledged. Forms must be tried 
out on work and changed many times before they finally get 
down into shape. It is a mistake too often made that each 
particular business must have forms differing from those used 
in other lines of work. It is possible to have a practical uni- 
formity about such methods, so that a set of forms used in one 
place can do in another, and forms prepared for one line of 
work can be used in another. There may be some difference 
in some of the details, but it should not go further. 

The writer's habit has been to make forms on mimeograph 
or hektograph and try them out, making changes frequently 
until by the time a job was completed a form would be worked 
out, and then when a similar job came up the form for it was 
ready. Finally, after a number of years of experience in han- 
dling work personally, and by means of foremen sent off to 
distant parts, he worked up a system for small pieces of work 
that has been very satisfactory in his own case. 

In the first place comes the cash book. This is very im- 
portant. He has had young fellows who took courses in busi- 
ness college, who actually did not know a simple method of 
keeping track of money spent and money received and how to 
balance the book. No matter how many forms are devised, the 
cash book cannot be dispensed with. The size of the page 
matters little, but for the sake of uniformity and the filing away 
of books, etc., he prefers a cash book having a page practically 
6 by 9 in. in size, ruled for single entry. Upon the left-hand 
page enter all money received, and upon the right-hand page 
enter all money expended. Figure 257 shows the appearance 
of a cash book used on one job, with the names changed. These 
pages illustrated give the account for 1 week. It is presumed 



SYSTEMS OF COST KEEPING 



537 



that a report will be made out each pay day evening to the 
home office, and the report for the week shown on the cash 
book pages is given in Fig. 258. The report is made on a 
sheet of paper purchasable at any stationery store. 




One book will do on almost any job of the ordinary size that 
one man will be sent away to take care of. The habit of the 
writer is to buy a book containing about 180 pages. The job 
has to be completed within a certain number of weeks. For 
instance, some job we are now considering will take 30 weeks. 



538 CONSTRUCTION COST KEEPING AND MANAGEMENT 



Reserve all the pages up to page 70 for cash accounts. The 
cash received will occupy one page and the cash paid out will 
occupy the facing page. Therefore, for each week there will 
be two pages reserved, and a few can be added in case the job 
overruns the time. Even if the cash items only take a few lines, 
it is well to give the whole page to the week's items, as it looks 
neater and allows of the making of entries afterwards in case the 



CXisoA fyjfZ l-bwJL ChffixLx-* ' 
(p-fruKl-jrv^ Af. V, X^O' Co 




* 3 

10 
3 

If 

9 

7 

zs 

/If 



Z&¥ 
Z$0 



S¥S 



IS 
f3 
3¥ 

So 

¥S 

i£ 
*>7 

21 



fU 



Z70 

2JS 



f¥5 



V4 



fC> 



Fig. 258. — Weekly cash report from cash book. 

books are gone over to get unit costs, etc. On the job shown here 
here was supposed to be a cash balance in the bank at all times 
of not less than $200, and a check for the weekly pay roll was sent 
on from headquarters in time to take care of pay day, which 
was Saturday. 

Having reserved for the cash account a little over double the 
number of pages it is estimated the job will last weeks, the 
remaining pages are used for keeping track of bills received. 



SYSTEMS OF COST KEEPING 



539 



Each bill is copied in full the day it is received. Figure 259 
shows how a page looks. These bills should be copied in full 
daily and mailed to the home office with the daily work report. 
There should be no delay in doing this work. The experience 
of the writer, and of every employer of men, has been that if 
things like this are not attended to daily they will be neglected 
and at the final moment there will be a rush. A man who will 
not do this work daily should be discharged. There is no 
excuse. A few minutes' work each day saves a great deal of 
worry and bad work before the job is completed. The home 
office always wants the original bills. Very many times a home 



WfoA 



Wlok 



nvucl 



7vu& 



is 



ts 



(l#--£vt*»»rv<i, fiyf. P. "fZ&s Co 
OfOf^o Zx,4-X/Z Vtv-21 tJfo 
SO' ' Zxl,X. IZ (aM-ZI IZ.io 

/mm -&f- a&.t^ut£~>~o Zl Zl. oo 
ftUUut itUlmue. o^c-c-t. % 

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fl#-£uL- (D. &jz.oLl. 



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37 



Fig. 259. — Page from book containing copies of bills. 

office does not see why the man on the job needs any copies of 
bills at all. Invariably when a dispute arises the home office 
appeals to the man on the job, and it is a fine thing for him 
to have a record. 

Instead of going to the trouble of copying these bills, it is 
required by some firms that duplicate bills be obtained for all 
purchases. There are some objections to this. Many time pur- 
chases are made for cash, and to delay while the slow-moving 
bookkeeper makes out a duplicate bill, might cost more dollars 
in lost time than it is worth. Take the cash slip and go. A 
great many firms, especially in the smaller towns, never make a 



540 CONSTRUCTION COST KEEPING AND MANAGEMENT 

habit of giving duplicate bills, and to ask for them causes bother 
and delay. Very often they are not given and then some part 
of the account is lost. Duplicate bills are a source of great 
annoyance nine times out of ten, and very often a first-class 
foreman becomes poor in looking after his regular work because 
of the time consumed in looking after the accounts. The 
duplicate bill idea is good if it were the habit of every business 
house to make them out. In one town a small contractor was 
told by one house that his business amounted to so little that 
they did not care to keep it if they had to remember every time 
to make out duplicate bills for every little purchase he made. 
Duplicate bills are pasted in invoice books or put in letter 
files, and when the inevitable inquiry comes from the bookkeeper 
in the home office, the particular bill wanted is often missing. 



Co/vs/ij/vo/? 



Material 



.} i 



Freight 



flr»t fff 



(W*- & 



Sm'Mmg 



W K ~ tf*'* 



Tfkmor/cs 



Fig. 260. — Double page ruling for carload freight shipments. 

It does happen sometimes that mail is lost or destroyed, and the 
importance of having copies of all papers should not be over- 
looked. The writer is very firmly impressed with the value of 
a hand-made copy of every bill received. These bills should 
be sent to the home office every night in order that there will 
be no accumulation. 

In the back of the book there should be a record of carload 
freight received. It is usually easy to tell in advance about 
how many carloads of material will be received. Counting one 
line for each car record, count off twice as many lines (for some- 
times things turn out differently from what was expected), and 
rule up the pages covered by these lines as shown in Fig. 260. 

These pages can be the very last pages in the book. The book 
will then hold a complete record of cash received and expended 
on the job; a complete record of all bills received and the dis- 



SYSTEMS OF COST KEEPING 541 

position made of the bills; a complete record of freight receipts 
in carloads. This makes a complete and satisfactory log of 
the job, and the average contractor will find such a record a 
good thing to have. 

It usually happens that a number of blank pages are left 
in the book when the job is completed. The writer, therefore, 
completes his books by writing in them, after everything is 
cleaned up, a concise history of the job. The first page is used 
as an index and here he indexes the items so that they can be 
referred to. In this history he records how the job was secured, 
pasting in clippings, if they will help, gives some idea of condi- 
tions encountered, the weather, the satisfaction given by the 
foreman, etc., and whether a profit was made or a loss sustained. 
If a profit, then the places on the work where it was made; if 
a loss, then some ideas are given as to why loss was incurred 
and the lessons learned. This looks like a great deal to place 
in the one little book, but it is simplicity itself when started, 
and a book for each job gives a man a splendid record of a life's 
work. It very seldom happens that the head office ever con- 
siders that a man has such records, therefore the general run of 
foremen are at perfect liberty to keep them, and in this way 
reduce their experience to writing for guidance in future work. 

The daily record is an important subject. The writer has 
used the form here given (Fig. 261) for a number of years. 
He has been employed by firms that asked him not to bother 
sending in a daily report, but he. always replied that if he did 
not make it out every day he would soon try every possible 
means to avoid making out a weekly or monthly detailed report. 
As some daily idea is wanted of how the work is progressing, 
this report should be made out daily. It takes only a few min- 
utes and when done is a great convenience to have to refer to; 
besides, a record like this is very valuable in case of lawsuit. 
Lawsuits cannot be always avoided. The sheet of paper is 8}£ 
by 12 in. The lines ruled for records are 34 in- apart. There 
are nine lines for the pay roll division, six lines for the material 
subdivision, five lines for the record of bills received and mate- 
rial ordered, and four lines at the bottom for the daily progress 
statement, which is continued on the back by reversing the sheet. 
The back is unruled. 

The report is made out generally in lead pencil and a car- 
bon copy made. The original is sent to the home office and the 



542 CONSTRUCTION COST KEEPING AND MANAGEMENT 

carbon kept on the job. Such a report, it may be readily seen, 
lends itself to any job or class of work. If the job is large and 
divided into a number of classes or sections, then such a blank 
can be filled for each. It does not necessarily mean that all 
the details of a large job shall be crowded on to one small sheet 
if more space is areally required. The main thing is to have a 
record of all that is done each day, and have on the record enough 
information so that cost statements can be worked up from it 
and unit costs derived when wanted. 



DAILY REPORT 

On Job— , , ,. r«r 



t b« moiled each e 



information necessary to enable Home Office to k< 
Accidents must be mentioned in this 
Troubles. Dispirits or Disagreements 



. including Sundi 
and full panic-. 



Supt. Const. 

Jidcyo, using this form. If no work is done the fi 

be work. 

israte sheet mailed in same envelope. 



id. must be reported. Gii 




STATEMENT OF 

This statement refers to bills enclosed 
and forwarded the day 
bills in duplicate. 



MATERIAL ORDERED 

(Enclose carbon c 




DAILY PROQRESS. State here fully the progress made this day. with a 
ces must be made to drawings, maps, profiles, sections, etc.. in order that | 
Be brief but omit nothing essential Use back of this sheet in preference 



Use sketches when necessary. Pcf« 
o ends will be reversed. 



(Put Date on this line also) 



Fig. 261. — Daily report. 



The time to distribute the cost accounts is each day as the work 
is done. Records are made of delays and why they occurred. 
If high costs are encountered, the daily report shows why and 
how. 

The writer, and every man engaged is this kind of work, 
knows that very few firms work up their cost records as they 
would have us believe they do when they read papers before 
societies on the subject. Much data is collected that is never 
made use of in the future. Elaborate blanks are often prepared 



SYSTEMS OF COST KEEPING . 543 

that fall into disuse a short time after adoption. Therefore the 
importance of having a plain, common -sense record of daily 
operations can be appreciated. Some firms do not want daily- 
reports. Others go to the other extreme and want more than 
the one lone man on the job has any right to be expected to give, 
and instead of having a first-class foreman on the work, they 
make the bookkeeping part take so much of his time that they 
have a high-priced and incompetent accountant on the job, which 
is allowed pretty much to run itself. More complaints are 
received by the foreman about the poor way in which he sends 
in his reports than about the loss of money on the job through 
neglect of his work. 

The pay roll deserves a section to itself, and another article 
will take up this important subject. For the average job on 
which a man will be sent away from home to manage, the com- 
mon pay-roll books to be found in every stationery store will 
be sufficient. After all, it simply requires that the time of every 
man be kept properly. To avoid taking too much time in 
copying names, it is well to use on a weekly pay roll the 1- 
week books; on a bi-weekly pay roll the 2-week books, and on a 
monthly pay roll the monthly books. They cost 5 or 10 cts. 
each and fit nicely in the pocket. Such instruction seems 
elementary, but the writer has run across men whose books were 
so marked up because of the wrong blank having been started 
with, that a little elementary caution about pay-roll books seems 
necessary. When a job requires fewer than 100 men, the ordi- 
nary stock pay-roll book will be all right. It is only when a 
larger number of men are employed that something better is 
required. 

The keeping of accounts on an ordinary contracting job is 
very simple. It is, however, absolutely necessary that the work 
required be performed every day. Five to ten minutes per day 
will do it, whereas letting it go to the end of the week or to any 
more convenient season means, very often, almost invariably, 
a quarrel with headquarters. Five minutes each day is a short 
time and can be spent after quitting time to advantage. The 
feeling of satisfaction coming with completed work is fine. Five 
minutes per day accumulates until it means half an hour on 
Saturday and many times means more than this, for the spirit 
that leads a man to put off the 5 min. makes him careless about 
placing his papers where he can lay his hands on them. Many 



544 CONSTRUCTION COST KEEPING AND MANAGEMENT 

times the disinclination to do the 5 min. daily work has cost a 
man an afternoon and night of worry on Saturday or Sunday. 
In fact, if the work is let go until the end of the week, it is gener- 
ally neglected until Sunday night, and then the Monday begins 
with headache and clouded mind. 

The cash report has been dealt with as one of the items com- 
prising the weekly report. Accompanying it should be all the 
vouchers, in the shape of receipted bills, cash slips, receipts for 
money paid, the payroll and cancelled checks returned from the 
bank. 

Bills paid by check from the home office are sent there daily, 
after copying in the bill record book. They are also noted on 
the daily report as shown. It is important that the bills be sent 
in daily so the home office can take advantage of cash discounts 
and bills paid locally should be met promptly for the same rea- 
son. This cash discount is an important item as affecting credits 
and profits, so some explanation may be of benefit to young men 
just embarking in business or on their first independent job. 

The following explanation from Ryerson's Monthly can 
hardly be improved upon : 

"A Cash Discount is a premium or inducement offered by 
a merchant to his customer to pay a bill before it is due." 

Cash Discounts vary in the several lines of trade and their 
importance may be judged when it is stated that in some large 
concerns, the total profits at the close of a year's business are 
represented by the savings through taking advantage of all 
discounts. 

Some houses have the terms and discounts fully and plainly 
stated on each invoice; others mark it, for example, "30 — 1-10," 
which means the bill matures 30 days from date, but if paid 
in 10 days a discount of 1% from the face of the bill may be 
deducted. 

All progressive business houses take advantage of every 
cash discount that equals or exceeds the prevailing rate of in 
terest. The values of various discounts are : 

60 days, less 2 %— 10 days = Interest at 14 i% 5 %. 
60 days, less 1 % — 10 days = Interest at 7 % %. 
30 days, less 2 % — 10 days = Interest at 36 %. 
30 days, less 1 % — 10 days = Interest at 18 %. 
30 days, less H% — 10 days = Interest at 9 %. 
30 days, less }$% — for cash = Interest at 6 %. 



SYSTEMS OF COST KEEPING 545 

To present it in another way. If you have purchased a bill 
amounting to $300 on terms of 30 days — less 1%, if paid in 
10 days and the prevailing bank rate of interest is 6%, you 
could make a saving of 12%, by borrowing the necessary amount 
from your banker and discounting the bill. 

One % on $300 = $3; 6% on $300 for 20 days = $1; amount 
saved, $2. Which equals 12% on $300 for 20 days." 

We thus see that in the course of a year considerable sav- 
ing may be made and profits enhanced by discounting bills. 

If discounts are taken, common honesty requires that pay- 
ment be promptly made according to stated terms. If the dis- 
count time is 10 days, do not let it run over that time and then 
deduct it. The merchant feels, and justly, too, that he has been 
defrauded out of a portion of his profit. The consequent dam- 
age to the credit of the tricky purchaser is of greater moment 
than the small amount he may have gained by taking an extra 
5 or 10 days to which he is not entitled. 

The bills paid locally and shown in the cash report should 
be folded so they will be 33^ in. wide and be less than 9 in. 
long. On one end should be a memorandum giving date of bill, 
amount and name of firm. Receipts and cash slips on small 
pieces of paper should be pasted separately on sheets of regular 
letter size and folded and marked in the same manner. These 
vouchers should then be arranged in order to correspond with 
the items in the cash report so the clerk at headquarters may 
readily check the items. Put a band of paper about 4 in. 
wide around the bundle, leaving the written memoranda clear, 
and on the band write: 

Cash Vouchers 

Week ending 19 ... . 

Job 

Foreman 

This should be written on both sides, but is really not re- 
quired except upon the side showing the memoranda on the ends 
of the folded vouchers. 

The pay-roll report should not be enclosed with the cash re- 
port vouchers, as it is a separate matter, like bills paid from the 
home office. If the company has no special form for pay-roll 
report that shown by accompanying blank, Fig. 262, is a good 
one. 

35 



546 CONSTRUCTION COST KEEPING AND MANAGEMENT 

This form is used when men are paid by check or in some 
way not requiring the pay roll to be receipted. If the pay roll 
has to be receipted two more columns must be added: one to 
contain the name of the workman, the other that of the person 
in whose presence he was paid. This person should be some 
one besides the foreman, who signs the roll at the bottom as 
"Correct," so there will be two witnesses. 

In arranging the pay-roll report put at the head the head 
man, letting each line hold the name of a man lower in position 
or authority than the preceding line, until the ordinary laborers 
-are reached, when they will be placed according to number. 
In the columns giving rate of pay such an arrangement groups 



PAY ROLL, Weejc Ending 


19 
























No. 


Name 


Occupation 


Rate 


Time 


Amount 


Day 


Hour 


Days 


Hrs. 





















Fig. 262. — Payroll report. 



men by pay and makes the report easy to check. In these 
columns use "ditto" marks instead of repeating the rate on each 
line. Never use "ditto" marks in the columns headed "Days" 
and "Hours" no matter how many men have the same time, and 
never use "ditto" marks in the columns headed "Amount." 
The pay-roll report should be in duplicate, the original sent to 
the home office and the copy kept on the job. It is well to make 
the report in lead pencil, using an indelible pencil, and have a 
carbon copy. Placing a damp blotter over the original will 
bring out the marks clearly and "set" them. 

A regular order blank should be used for all material and 
as these blanks are stock forms carried by all stationery stores 
no particular form need be given here. No matter how unim- 
portant the purchase, always make out a written order. If 
goods are ordered by telephone the written order should be 
mailed and marked "Confirming telephone order." Two car- 
bons should be made of every order. The original should go 



SYSTEMS OF COST KEEPING 547 

to the dealer, the duplicate be mailed to the home office with 
the daily report, and the triplicate be filed on the job to check 
the bills when received. It is understood, of course, that there 
is a letter file on the job in which to keep correspondence and 
carry papers. When bills are received they should be checked 

with the copies of orders and each order marked "Billed 

. 19. . . .," to guard against a second billing for the 

same material. All orders should be numbered consecutively 
and in checking bills the order number should be marked against 
each item. If an order is spoiled mark it "Spoiled" and send 
the original to the home office to preserve the sequence, and file 
the spoiled carbon. 

Never pay money without a receipt. Carry a receipt book 
always and have the receipts numbered. The stub is the job 
record and the receipt is sent in with the weekly cash report as 
a voucher. 

Have the bank book balanced weekly. Check all cancelled 
returned checks on the stubs of the check book. With the 
weekly cash report send all returned checks to the home office. 
Arrange. them according to number and date. Place around them 
a band of paper endorsed thus: 

Checks Retuened 

Week ending 19 ... . 

Job 

Foreman 

Checks amount $ 

Outstanding numbers 

amounting to $ 

One or two pages should be ruled in the cash book giving 
the number of each check, the date and amount. A final column 
should give date check is returned canceled to home office. The 
foreman can thus keep track of checks issued and go after 
men who are disposed to keep them. No check should be 
out for more than a week. Payments the last week or two 
should be made in cash so matters can be closed up at the bank 
properly. 

If the workmen are paid by check there should be a separate 
check book "with another series of numbers. For example, the 
regular check book may begin with 1 and the labor account 



548 CONSTRUCTION COST KEEPING AND MANAGEMENT 

check book may begin with 1001. A rubber hand stamp should 
be made for pay checks reading about as follows: 

This check is accepted as payment in full for labor 
and all services rendered to and including the date 

hereon, by the undersigned payee for 

on the job in the city of 

the blank spaces, of course, in the above form, containing the 
proper names, as they could not be filled in with pen within any 
reasonable expense. That is, there should be a rubber stamp 
for each job. If the cost will not be too great the above could 
be printed on the back of each check. The place for this re- 
ceipt across the upper end on the back so the first endorsement 
by the payee comes under it. With such a receipt it is unneces- 
sary to have the men sign the pay roll. 

When making the weekly cash report put the returned pay 
checks in bundles, having a wrapper endorsed: 

Pay Checks 

Week ending 19 ... . 

. . Job 

Foreman 

Amount of pay roll $ 

Checks herewith $ 

Numbers out 

The pay roll is, of course, the voucher for labor cost each 
week, but the following week nearly all the checks will come 
in and can be sent on, thus completely vouchering this item. 
The pay checks for each week should be kept separate even when 
there may be only one. When received at the home office the 
clerks there will collect them and by cleaning up every paper each 
week on the job the foreman is relieved of the worry of having 
several items to keep track of until each account is complete. 
At the home office there are men employed to keep accounts. 
The foreman on the job has merely to send everything they re- 
quire in the way of information and send it in such a way that 
it will be clear to all concerned. He has no business keeping 
pay-roll checks until they all are in. He has no business keeping 
any .papers relating to unfinished business. His desk must be 
kept clean no matter how the clerks at home growl. They have 



SYSTEMS OF COST KEEPING 549 

the facilities for caring for the information and in proportion 
as the business grows the more thankful they are to have a 
conscientious, careful foreman on the out-of town job. 

The accident report is something that must be attended to 

, very promptly. All contractors carry some accident insurance 

and the companies are strict in regard to having reports made 

promptly. No time should be lost in making out the report and 

mailing it to the proper address. 

In this particular considerable trouble arises. When a man 
is injured common humanity demands that such relief be given 
him as he requires. There must be no delay, for delays are 
sometimes fatal. Therefore, the foreman should have some band- 
ages and appliances and supplies on hand for first aid work and 
should know how to use them. The aid should be given promptly 
and the injured man and his friends should be made to feel 
immediately that the boss sympathizes and is anxious to get him 
fixed right. 

Owing to the insurance matters, however, we generally see 
a rather scared, and sometimes a badly injured, man sitting help- 
lessly holding to the injured place while a lot of helpless looking 
men hang around waiting for the surgeon, and the foreman who 
should be competent to give some help, is worrying everyone with 
questions and showing about as much sympathy as Jack Frost 
shows for the tender bud in the early spring. So far as the men 
see, the boss cares nothing for the injured man but is merely 
intent on getting the information required by the insurance com- 
pany. The men also know that there is nothing humane in the 
business at all but that the insurance company intends fighting 
the case at once. In the picture can be seen the seeds sown for 
a fight between the injured employe and the unknown corpora- 
tion that has insured his boss against claims from him. Such 
things breed antagonism. 

The things the insurance company wants to know about the 
man are simply his name, age, address, occupation, whether mar- 
ried or not and his nationality. When he is injured and scared, 
for all these strong fellows get terribly scared when hurt, it is 
heartless, to say the least, to annoy him and his friends with such 
questions, especially when they all know it is for the purpose of 
giving information to an indemnity company. The time to col- 
lect such facts is when the man is hired. There may be one 
hundred men constantly at work. Owing to the shifting con- 



550 CONSTRUCTION COST KEEPING AND MANAGEMENT 

stantly going on there may be a total of several hundred men 
engaged upon the work during its progress and it is a bare pos- 
sibility that none will be injured. Nevertheless it pays to keep 
all the statistical information ready for use when wanted. A 
man may be killed and his companions may not be able to give 
information when questioned. The class of lawyers known as 
"ambulance chasers" is annoying, and it often happens when a 
man is carried home that a representative of one of these harpies 
has been there already and the mouths of the family are closed 
tight. 

The writer has on each job a small plain book with a couple 
of hundred pages. Each man has a number and it happens 
always that in the progress of the work several men will have 
the same number. Each page of this book has a number and he 
puts on each page the name of the man who has the number on 
that page. As each page has between 20 and 30 lines it is pos- 
sible to keep a complete record of the names of men who have 
had the number. Following each name is put down the date 
the man started to work. The day he stopped may, of course, 
be put down, but it is not necessary and is often neglected. This 
book is merely an index to keep track of the names attached 
to the numbers. 

For keeping track of the men he has small cards, 3 by 5 in., 
in a small pasteboard box with an alphabetical index. Such an 
outfit costs about 50 cts. The cards may be purchased with 
printing, on providing lines for the name, address, nationality, 
etc. These are stock cards. On the other lines may be put 
down whether a man is married, his age, number of children, 
etc. When a man is hired a card should be filled out with this 
information and the number he is given should be placed on 
the card. The date he begins is there also and these cards are 
very convenient to have to keep a record of the man throughout, 
if he is a man who may be good enough to attract the atten- 
tion of the boss while he is on the job. Having filled this card 
it is filed alphabetically and on the book containing a record 
of numbers, the name is put down. When a man is injured it 
is just possible he can say nothing so he will be identified by 
the number attached to his clothing. By referring to the num- 
ber record book, or to the time book, his name can be found and 
on reference to the card index his residence and accident in- 
surance information will be found. These preliminaries being 



SYSTEMS OF COST KEEPING 551 

out of the way it is possible to show the proper sympathy 
and give the man first aid. Promptness and efficiency in these 
two very important particulars have a wonderful effect on the 
men. After the injured man has gone the witnesses may be 
^brought in one at a time, and their evidence obtained. The 
accident report may be filled out, the record completed on the 
card and the foreman is ready then for the next accident. In 
such cases it is highly important that three be due regard for 
common decency and everything possible should be done to avoid 
giving offense. Common laborers at such time feel particularly 
helpless. 

Each foreman will have, of course, a book containing the 
names and numbers of the men under him. This book he is 
supposed to check with the timekeeper daily. It very often hap- 
pens that the job is so arranged that the work can be attended 
to by the timekeeper alone and the foreman will not be required 
to keep track of the men. In the majority of cases when this 
can be done it is a decided advantage. If the foreman has 
nothing to think of but his men and getting the most possible 
out of them, he will do his work satisfactorily. When he has 
to keep a book, however, and makes entries in it, he loses much 
time. 

The timekeeper should go over the job twice each day. In 
the morning between eleven and twelve and in the afternoon 
after four o'clock. His time book should be arranged with a 
page for each foreman and his men. The names of the men 
should be arranged consecutively by number. This will insure 
the least possible loss of time in getting the time. 

On some work employing a certain class of men, and espe- 
cially in large cities, the men shift frequently. In a city like 
Chicago, in certain sections, the common laborers seldom stay 
more than 2 or 3 days. They may work on the job several 
times a month but only for very short periods. The law requires 
that a man be paid in full when discharged, and these fellows 
generally manage to be discharged, for if they left voluntarily 
they would have to wait until pay day for their money. The 
obvious thing to do is to learn to know these men and after 
awhile decline to employ them. It often is the case, however, 
that men are not too plentiful and some of these fellows are 
really good workers when they do work, so it is well to ignore 
their peculiarity of wanting to draw their pay too often and 



552 CONSTRUCTION COST KEEPING AND MANAGEMENT 

merely arrange the time keeping system so they can be kept 
track of. Here is where the number system is awkward an 4 
sometimes to oblige the timekeeper and to simplify his work, 
good men are refused employment after they have quit several 
times. It is not always possible to save numbers for such fel- 
lows. The writer makes it a rule to avoid duplication during 
each pay day interval. That is, if pay day comes each Saturday, 
a number will be given only once during the week. If pay day 
comes twice a month, then the number is given out only once 
in the 2 weeks. Such systems cannot be always followed if 
one has a small supply of numbers. On a job requiring 100 men 
there should be about 300 numbers to carry out such a system. 
The writer generally figures on having about twice as many 
numbers as he has men on a job constantly employed and then 
giving out a particular number only once between pay days. It 
has happened in seasons of the year when the weather conditions 
were very bad and there were frequent lay off periods, that such 
a supply of numbers was not sufficient. This occurs in large 
cities, as a rule where work is being done in the vicinity of large 
industrial establishments where indoor work may be had. The 
common laborers will do their best to secure an indoor job as 
soon as bad weather comes on and will hang around the big 
establishment until their money is gone before applying for an 
outdoor job on construction. So it often means that after a 
couple of days' lay off almost an entirely new gang has to be 
hired. The matter is complicated often by some of the older 
men turning up some morning and getting their number in the 
first 7 o'clock rush, and thereby causing lots of trouble when 
the new man who has that number comes in 2 min. later and 
demands it. Such little problems the timekeeper must wrestle 
with and get up schemes to make his work as easy as possible. 
The writer used for years on his work a silicate slate book. 
These books may be obtained at almost any stationery store 
and have four, six or eight pages, ruled in lines for names. On 
the right hand edge rule a line and put down the numbers in 
ink. An acid ink is best. On the line opposite the numbers 
put the names of the men in lead pencil. By dampening the 
finger the name may be readily erased and when the man goes 
off the job his record will be completed in the time book and 
his name erased from the silicate slate. On the line opposite 
the number put down the date on which that number may be 



SYSTEMS OF COST KEEPING 553 

again allotted. When the number is given erase the date and 
put down the new name. On the left hand edge of the page is 
to be ruled a column in which may be entered the time daily. 

The advantage of such a book is that the time may be obtained 
on a job very rapidly and with the least number of mistakes. 
Every man is supposed to have conspicuously displayed a 
numbered badge. When the timekeeper goes out for the time 
he can stop each man he comes to, regardless of where he finds 
him, and turning to the number in his book ask the man his name. 
If it agrees with the name there he checks the time and goes on. 
After a while he, of course, learns the names of most of the men. 
It is an easy matter to check all the men after going over the 
job. If some have been missed the fact is discovered before 
returning to the office and the particular numbers can be hunted 
for. This is very much better than taking the time from a 
foreman's book. It eliminates favoritism and occasionally a 
foreman will put a man down as working merely to save time 
for himself, when the man may really be soldiering in the brush. 

Upon returning to the office the time is transferred to the 
time book. On going out in the morning the men entitled to 
full time are checked off with a vertical mark. If only part 
time the number of hours will be set down. In the afternoon 
a cross mark will indicate full time. The transfers are made 
to the time book after the afternoon round. As each transfer 
is made the timekeeper must cross out on the slate, the time 
record for that day. After all the entries are made he should 
go over the slate very carefully indeed to see that everything 
has been entered properly, and thus avoid troubles on pay day. 
The only objection to this system is that the record taken on 
the job is erased and if an entry has been forgotten the workman 
will have a right to complain. Care, however, will prevent this. 
The writer in handling thousands of names in nearly 20 years 
of work has had so very few cases of trouble that he believes 
this system very good. Trouble will always come up about 
time, no matter what system is used. 

An improvement on this system would require a slip for 
every man every day and the making of these slips would take 
too much time. The timekeeping must be done with a minimum 
of work. If ordinary time books are used the constant changing 
of the men makes it annoying and very often a timekeeper gest 
mixed on his numbers. By having the silicate slate book the 



554 CONSTRUCTION COST KEEPING AND MANAGEMENT 

vacant lines always show at a glance the numbers available for 
new men and the dates on which they may be given out. Dupli- 
cate numbers on the pay roll can then be avoided and the pay 
roll easily made up on pay day for the report to headquarters. 

Every man should have a number. Foreman and time- 
keepers complain that the men do not like to wear the numbers 
where they may be readily seen, and if not in plain sight much 
of the object of having numbers is defeated. A small, round 
brass tag with a hole to which is attached a strap is often given 
to the men, who hang it to a button hole like a watch fob. This 
is too low down on the person to be readily seen by the time- 
keeper and is in a place where the lifting of materials may tear 
it off. A number attached by a safety pin and worn on the 
breast is often knocked off when men have to lift heavy loads 
or climb to some position where they can work. The fact 
that the missing check is charged to them makes many men 
carry the numbers in their pockets and time is lost whenever 
they have to produce them for the inspection of the timekeeper. 
The writer believes it a good idea to have brass checks about 
the size of a silver dollar attached by a catch pin to the hat. 
Here it is out of the way and is readily seen. So far he has had 
few men object to wearing it there. The check should have 
not only the number on it but the name of the company. The 
men, of course, must pay for lost checks in order to teach them 
to be careful. 

These systems here described are intended for the small 
contractor and the man who is sent from home and who for the 
time being is practically a small contractor. Large concerns 
will have their own methods and blanks and a book of instruc- 
tions to guide foremen. Gilbreth's " Field System" is an excel- 
lent book for every man to own who is in charge of work. The 
way to obtain costs from the papers and books here shown will be 
given in the following article. 

On the subject of paying men, a few words will not be amiss. 
If there ever was a fiendish invention devised to keep con- 
tractors and their men apart it was the invention of the payment 
of common laborers by check instead of in currency and coin. 
It saves very little work for the timekeeping department and 
is a most inhumane proceeding. The writer never does it if 
permitted to do otherwise. The men feel awkward in going 
to a bank. No matter how considerate the bank officials may 



SYSTEMS OF COST KEEPING 555 

try to be, offense is easily given and very often a supercilious 
young fellow irritates the poor, ignorant men who go in. The 
question of identification is something that must be attended 
to and the bank officials, working on salary, cannot take too 
many chances. All this is very bewildering to the men. 

Banks close earlier in the day then the workmen get off, 
so they must go at noon to cash their checks, and oftentimes 
they stay longer than they should. If they cannot get off to 
cash the check they have to go to a storekeeper. 

In paying money to the men it is well to know that nearly 
all of them owe a little money to the stores at which they trade. 
If they are paid in bills of large denomination and go to a store- 
keeper he will keep his debt out of it. If they owe nothing at 
the stores it is almost impossible to get any bill larger than five 
dollars changed, and frequently the small storekeepers with 
whom such men trade cannot change a five-dollar bill. They 
do a small cash business in which the amounts seldom run 
higher than 50 cts. and they have very little money on hand. 
In fact, in many sections it would not do for the storekeeper 
to let his customers know that he keeps more than a few dollars 
on hand. 

In paying men, therefore, a rule should be adopted to the 
effect that no man will receive a bill larger than $5 and that no 
one bill shall amount to more than half the total pay, and that 
not more than half of a man's pay shall be in one bill. If a 
man, therefore, earns $11, he will receive one five-dollar bill 
and the rest of the money will be in small change, and small 
bills. If he earns $9 he will not receive a five-dollar bill, but all 
his pay will be in small currency and change. By adopting such 
a rule the writer on several occasions has kept his gangs filled 
when other firms who were careless of the men's feelings had 
difficulty in keeping a full force at work. The day has gone 
by when the workmen on a job are to be considered merely as 
so much machinery. So far as the personal relations go, they 
are machinery, and to recognize the human element too much 
lowers efficiency. By treating them humanely, however, they 
respond very quickly. In no way can sympathy be more quickly 
established between the workmen and their foreman and em- 
ployers than by treating them on pay day as if they were getting 
something they were entitled to. They feel they have earned 
their money and resent any lack of feeling on the part of the 



556 CONSTRUCTION COST KEEPING AND MANAGEMENT 

timekeeper and the paymaster. The writer on pay day has the 
watchmen and foremen keep the men in line and accompanies 
the paying off with badinage and jokes as the men file by. It 
is easy to do and they .stand around cheerfully. Too often on 
pay day the men are yelled at and treated disgracefully. It is 
as easy to grin as it is to scowl, and grins are always reflected. 
So are scowls. The writer has never yet witnessed a pay day 
when loud yelling and brutality on the part of the men who 
keep the men in line was justified, yet he has witnessed it many 
a time. Not that it is common on the majority of jobs, but it 
is unfortunately too common simply because of the attitude of 
some men being like that of the policeman who apologized when 
he hit a man by saying, "No offinse, sur. I don't bate ye because 
I hate ye, but ye see I have de autority." 

The methods taken up in the preceding articles are account- 
ing methods pure and simple. They show merely how the man 
in charge on the job reports to headquarters all his doings day 
by day so the accounting department can attend to its business 
properly. 

On the daily report is a section devoted to the distribution 
of labor cost. This cost is obtained by making trips over the 
work and ascertaining as closely as possible what each man is 
doing, and such data are obtained readily when the timekeeper 
makes his rounds. It is not necessary to split cents on this 
matter. Each foreman can give a pretty good account of what 
he has been doing with his men. These costs will be distributed 
after the collector gets back to the office. 

Bearing in mind always that large concerns will have their 
own methods and that blank forms will be supplied on which 
to collect and report this information, the methods to be adopted 
by the foreman in charge of work for small concerns can be his 
own methods, changed, perhaps, for each piece of work. 

A blank book ruled in squares, six, eight or ten to the inch, 
as may be desired, is a handy thing to carry round. It becomes 
a regular diary and entries are made in it irregularly day after 
day. That is, when going over the work and certain piece of 
work is going on, a stop can be made and the movements of 
the men studied and their work timed. The notes can be made 
in the book, and as it grows it becomes very valuable. 

The writer has found a small case holding about 15 or 20 
3 by 5-in. cards a handy thing to carry around on work. The 



SYSTEMS OF COST KEEPING 557 

cards are ruled and at the top of one will be written a heading 
and a date. For example, one card has on it, "Erecting gin 
pole on Sumach Creek Power Plant, Aug. 15, 1891." On the 
lines underneath are data telling the size of the pole, the size and 
length of the ropes used as guys; the number of men employed, 
the tackle, and what the pole was erected for. Some account 
was given of performance. Under the Gin Pole index in the 
file will be found a number of cards relating to gin poles on 
different jobs. 

A series of cards relating to Derricks, Engine Setting, etc., 
will be found also in the card index file carried by a man who 
has been busy in such work for a term of years. This is the 
sort of data wanted by the foreman. To be sure, a pretty good 
knowledge grows on such matters and that is why experienced 
men are more valuable as a rule than inexperienced men. Under 
the modern system of ticketing information the new man gains 
over the old very rapidly. 

Labor is the hardest thing to estimate on any work. It is 
the largest item on work generally. Because of the uncertainty 
of the labor item many contractors go to extremes in the pur- 
chase and use of machinery. A contractor may become "ma- 
chinery poor," just as a farmer may become "land poor." The 
reasons are the same in both cases. The ignorant farmer, unable 
to make a decent living on a small farm, buys more land until 
he can hardly earn enough to pay taxes. The more intelligent 
farmer concentrates his efforts on a small place and gets along 
well. A contractor who does not know how to handle men 
properly, or who does not keep up to date on methods and whose 
knowledge of costs is not allowable of analysis, sees himself 
falling behind and blaming it on the labor, buys machinery until 
he is too heavily loaded. 

Old contractors are fond of telling of the times when a sewer 
contract, for example, having been obtained, the contractor 
hired a gang of men and they needed no foreman. Each man 
knew his place and the work proceeded finely, the contractor 
visiting it only occasionally. Nowadays the labor is always 
ignorant and the best of supervision is required. Wages have 
gone up and prices have come down. The remedy is obviously 
machinery. This is the remedy in some cases, but not in all, 
and the incompetent contractor cannot differentiate. 

Here is where the man with accurate cost and method data 



558 CONSTRUCTION COST KEEP I NO AND MANAGEMENT 

comes in as a useful member of society. The writer has seen 
a great many notebooks of contractors of the old school, and he 
found very little matter of value from their own experience. 
Their notebooks were full of clippings. They sneered at books 
and book men and yet cut clippings freely from papers and 
saved them for reference. They talked glibly of letting prices, 
bat knew little about " doing" prices. They knew vaguely that 
certain prices could be bid for work and there would be a "fair 
profit." The words "fair profit" were overworked and the legal 
profession still likes the term. Within a very few years the man 
with well filled notebooks containing records of work he has 
been in charge of and work with which he has been connected, 
is in demand. The writer last year was talking with the presi- 
dent of a contracting company whoc was bitter in his denuncia- 
tion of the publication of "method and cost" data, yet who kept 
for several months an advertisement standing in a number of 
papers for a man with records of work covering not less than 10 
years. His company wanted a chief engineer and manager with 
written records of not less than 10 years, work in a variety of 
employment, and he would employ no other. Yet he was angry 
because of the fact that methods and costs are things taught 
in engineering schools, and talked feelingly of the good old 
times when foremen and contractors were born and not made. 
Personally the writer prefers the manufactured article. 

The previous articles tell the young man how to do the clerical 
work that goes with every job, so he will make a good impression 
at headquarters. This article attempts to show him how to 
secure the data he requires for himself so every particle of experi- 
ence will be of value to him always. It is not so easy to do it. 
How can he do it? Each job is an experimental laboratory. 
Professors and investigators make experiments on materials 
and the designer works from very meager data very often, 
but relies implicitly upon it. The contractor must do the same. 
Costs are of value in proportion as the conditions are stated. 
It has been said they are of value only to the men who collect 
the data, but if they are of value to the collector alone, something 
has been gained by the collection and compilation. He is a 
better man for his observations and deductions. His methods 
will improve with his knowledge of costs, for the two are inter- 
woven. Good methods mean lowest possible costs, and low 
costs can be secured only by following good methods. 



SYSTEMS OF COST KEEPING 559 

Take the gin pole, for instance. Records of a dozen jobs 
on which gin poles were used showed that the last three or four 
gin poles were erected in less than half the time of the first. On 
the first job the young observer saw his first gin pole raised. 
The foreman of the gang and his men had raised gin poles be- 
fore. On the next job the foreman was also an old hand, and 
the young observer had nothing to do with it. On the third job 
he noticed a little wrinkle and put it down approvingly. Finally 
we come to jobs where he is a foreman instead of a timekeeper, 
and one job shows how he put up a gin pole with some experi- 
enced workmen and some ignorant laborers. The last three jobs 
he erected gin poles himself as foreman with laborers from the 
south of Europe who did not know English and who were green 
at the work, yet the time was ridiculously short as compared 
with the first job observed, and, of course, the cost was low. He 
had learned. It had covered a period of 15 years and during 
that time only a few occasions had arisen for this particular kind 
of work. If it had been left to the treacherous memory to record, 
no record would have been broken. As the facts were recorded, 
however, with sketches, it was an easy matter to refresh the mind 
when such a piece of work came up and the experience of others 
summed up in his experience produced results with which his 
employer was well satisfied. Now, as he went at the work in a 
proper and methodical manner, who can doubt that his men did 
not have something added to their stock in trade of methods 
and costs. Suppose he published the facts and showed how 
he did it. We can believe that every man who reads it will 
know better how to erect a gin pole and even if he does not have 
one to erect today he can file the information in something more 
durable than the brain tissues and have it ready against the time 
he needs it 

In this manner the young man will collect his cost data, 
remembering always that good methods and low costs are so 
intertwined that they cannot be separated. This is why pub- 
lished cost data are valuable. If the costs are very low, there 
must be a reason. If due to good methods, then there has been 
a distinct advance knowledge for the men who work. If the 
costs given are low because a mistake was made in omitting some 
items, these costs are subjected at once to a rigid analysis by 
men who know and there results another gain. 

Some years ago, and it was not so very many years either, 



560 CONSTRUCTION COST KEEPING AND MANAGEMENT 

a man was employed because he knew how to handle men. That 
was always the sort of man wanted. Today the average em- 
ployer wants a man who knows something about costs and is 
well versed in methods. It is the same kind of man after all, 
but the employers have learned. The man they employ has be- 
come methodical and therefore is a better and stronger man. 
He knows how to handle men because he knows so well what a 
certain price of work should cost and knows so well the best 
methods to save time and motion, that the men respect him. 
Formerly the foreman had worked his way up from the gang and 
was obeyed because of the success he had made, yet his men 
were free to criticize many times where their experience had been 
perhaps slightly better than his. The trained foreman of today 
commands their respect because of the unhesitating manner in 
which he goes at things and because he knows just when to 
come back to view the finished job. 

Like timekeeping and bookkeeping and the making of daily 
reports, the young man in a responsible position and the older 
man in charge cannot spend so much time hunting for method 
and cost data that they neglect their work, which is to keep the 
men moving and the job going at fever heat. They are there to 
obtain for the boss the most work at the lowest cost. He does 
not care whether they collect cost data or not. If he wants it he 
is willing to pay a man to collect it. He wants them to get the 
work out of the men and machinery and to' obtain for him the 
largest possible profit on the job. Every minute spent on the 
collection of cost data that can be employed in looking after the 
job is a minute of his time lost. 

Everything is useful. If a tab is kept of the time of men 
going to the storeroom for tool supplies and it can be shown 
that economy can be effected by putting in a couple of messen- 
ger boys or even installing an intercommunicating telephone sys- 
tem, then the time spent in observing this detail has been well 
spent. If a few minutes spent in watching the moving of a derrick 
results in the saving of a half hour on the next change, then the 
time has been well spent. What the eager seeker after knowledge 
must guard against is the habit of collecting data to such an 
extent that a man degenerates into a collector of data and noth- 
ing else. The writer knows men who can reel off costs by the 
yard and by the hour and who know all about the best methods 
of doing work, yet they are peculiarly helpless in directing men 



SYSTEMS OF COST KEEPING 561 

in the doing of these things. Such men are spoiled in trying to 
manufacture a foreman. Yet such a man on a job to help out a 
born foreman is an experiment worth trying. It was done on 
one piece of work where a good hustler was sent to help out such 
a man. The hustler knew how to keep men moving without 
false motions and the other man knew the motions. It was an 
ideal combination, for which the hustler, however, got no credit 
finally. He is still working as a foreman and the other fellow 
is president of a contracting company. 

The collection of data is important and the study of methods 
is important. The good man will learn to strike a balance and 
not neglect his work, while getting data from it that will be of 
service on succeeding jobs. 

However, it must be said that just as it is necessary for the 
accountant to know every item of expense entering into a con- 
tract in order to strike a balance between expenses and income, 
so is it necessary for the man in charge to know unit costs and 
how to obtain them. Too much nicety in getting them is as bad 
as too much carelessness. The segregation of unit labor costs 
and unit material costs may really be made very broadly on the 
general run of work. A close study of all the operations con- 
nected with the conduct of the work and especially things that 
take gangs temporarily from straight work, will well repay the 
student. 

Hourly Report Sheets Used in Tunnel Reconstruction. — The 
Washington street tunnel of the Chicago Railways Co. was 
reconstructed by Geo. W. Jackson, Inc., of Chicago. The forms, 
Fig. 263 and Fig. 264, were used to record the hourly progress 
of the work of excavating and concreting. With these forms 
the necessary data to plot progress and cost curves was supplied. 
They also gave a close check on the men, thereby tending to 
speed up individual effort, and furnished a complete, detailed 
log of the work. During the progress of the work the hourly 
reports were made out and telephoned to the main office. 

A description of the work in an article published in Engineering 
and Contracting, April 20, 1910 supplied the forms referred to. 

Rules for Construction Superintendents and Foremen. — The 
Construction Section of the National Safety Council, Chicago, has 
issued the following "safety first" rules for superintendents and 
foremen : 

First Convince Yourself that accident prevention is worth 

36 



562 CONSTRUCTION COST KEEPING AND MANAGEMENT 

while. It reduces accidents 75% or more, it reduces labor 
turnover, and increases efficiency. Others have obtained these 
results on jobs both large and small; resolve that you will obtain 
them on your work. 

Get the Men to Think and Act Safety. Instruct all new men 





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in safety when they are hired. Appoint safety committees 
and safety men. Install safety signs, warning signs, and safety 
bulletin boards. Invite the men to suggest safety rules and 
cautions. Stimulate the instinct of self-preservation. 

Use Safe Methods in Doing the Work. See that all safe- 



SYSTEMS OF COST KEEPING 



563 



guards are used, that materials are safely moved and well 
piled. Do not overload equipment, floors, falsework or scaf- 
folds. Keep passageways open and the entire job clear of 
rubbish. Do not let bolts, nuts or small tools lie around to be 
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to be stepped on. Permit no one to stand or work under a 
load or to ride a load being hoisted, and do not hoist a heavy 
load with a horizontal boom. Prohibit horseplay and practical 
jokes and see that they are eliminated. The public should be 
excluded from the job. Do not let any one take a chance. 



564 CONSTRUCTION COST KEEPING AND MANAGEMENT 

Use Good Tools and Equipment. Inspect frequently and 
keep them in good condition. Guard all gears, pulleys, belts, 
electrical apparatus, etc. Provide goggles when needed to 
prevent eye injuries. Remember that the goose neck and 
gudgeon pin are the critical points of a derrick. Discard all 
poor equipment at once. The strength of guys, hoisting lines, 
ropes, blocks, hooks, chains and slings and their fastenings 
should be beyond question. Keep tools sharp and handles and 
striking faces in good condition. 

Use Good Timber, Well Framed and Sway Braced for false 
work, scaffolds, shores and temporary supports. Prevent falls 
and injuries from falling objects by providing hand rails, toe 
boards and wire screens around elevated structures, scaffolds, 
openings and pits. Keep ladders and runways in good 
condition. 

Do Not Work if Conditions Are Unfavorable because of high 
wind, poor light, storm, heat or cold, etc. 

Fit the Man to His Job. Do not let a reckless, drunken or 
sick man work for you. 

Be Vigilant. Instruct your men to be watchful for the safety 
of themselves and fellow-workmen. 

Be Prepared for Accidents. Secure a first aid kit and learn 
why and how to use it. When starting a job find out about 
doctors, hospitals and ambulances and post the information 
near the telephone. Learn the prone pressure method of resusci- 
tation from drowning, asphyxiation and electric shock. Treat 
all small cuts and scratches to prevent infection. 

Ask Your Home Office or the National Safety Council for 
assistance if you need it. They will gladly give suggestions 
that will assist you to solve your safety problems. 

TEN RULES FOR FOREMEN 

The following rules are from a bulletin of the National Safety 
Council: 

Be fair. Have no favorites and no scapegoats. A foreman 
has to act as judge many times every day; therefore, he must 
be just. 

Make few promises and keep them. A foreman must be 
exact in this particular. Sometimes a foreman forgets that his 
job requires a high standard of truth and honor. 



SYSTEMS OF COST KEEPING 565 

Don't waste anger — use it. Anger is valuable and should 
not be used carelessly. Keep your most forceful language for 
special occasions. 

Always hear the other side. Never blame a worker until he 
has been given a chance to give his point of view. 

Don't hold spite — forgive. When you have had to scold a 
worker, go to him later and show him his faults in a friendly 
way. 

Never show discouragement. Never let yourself be beaten. 
A foreman must have perseverance and the "never say die" 
spirit. 

Notice good work as well as bad. Let the workers see that 
you can appreciate as well as condemn. 

Watch for special ability. Take a keen human interest in 
your workers. Put each one where he can do his best. 

Take your full share of blame. This is the most difficult of 
all. The foreman who can share both blame and praise with his 
workers has discovered the secret of managing men. 

Prevent accidents. Educate or eliminate the careless man. 
The good foreman is known by his men. 



INDEX 



Accounting and cost methods for 

contractors, 535 
Accuracy of reports, checking, 165 
Adding machines, 270 
Area, measurements of, 119 



B 



Balance of stores sheet, loose-leaf, 

463 
Blasting, punch card for, 317 
Bonus, the differential, 75 
for laborers, 100 
payment, rules for determining, 

96 
plan, application to construc- 
tion, 86 
plans for motor truck operation, 

101-108 
system, a, 91 
systems of payment, 67 
on tunnel driving, 92 
Bookkeeping for Small Contractors, 

259 
Brick masonry, punch card for, 319 

paving, punch card for, 322 
Bridge and culvert jobs, cost keep- 
ing system for, 532 
cost record, 517 
Building Construction, economical 
speed of, 201 
cost keeping blanks for, 338 
system applied to, 304 



C 



Cableway work, time studies on, 19 
Calculating machine, 290 
Card index order system, 295 
loose-leaf ledger, 354 



Card punch, blasting, 317 
brick masonry, 319 

paving, 322 
crushed rock, 315 
derrick, 319 
macadam, 321 
pipe fitting, 316 
quarrying, 314 
road culverts, 320 
roadwork, 320 
rock drilling, 318 
slope wall, 318 
sodding, 322 
steam shovel, 312 
street pavement base, 321 
trenching with cableway, 313 
record for section foremen, 414 
reports, designing punch, 151 
written vs. punch reports, 140 
Cards, daily report, size of, 150 
gang report, 145 
record, accompanying each piece 
of work, 161 
attached to each piece of 
work, 118 
using several, one for each piece 
of work, 161 
Cash book, 537 

Chart of drill holes in quarry, 363 
efficiency, rock channeling, 172 

excavation, 169 
expenditure for labor, 182 

for materials, 183 
progress, 333 
and cost, 176 

value in sinking shaft, 178 
summary of labor, material and 
plant, 184 
Charts, cost, 167 
graphic, 294 
progress, 173 

and cost, trench excavation, 
174 
567 



568 



INDEX 



Code operation, 233 

use of in. operations, 235 
Competition, law of, 27 
Concrete work, units for measuring, 

114 
Concreting, hourly report, form of, 

563 
Construction, bonus plan applied to, 
86 
work, cost accounting on, 464 
an office system for, 179 
Contract time, determination of, 

196 
Coordination, laws of, 12 
Cost accounting system, IT. S. Army, 
503 
and accounting methods for 

contractors, 535 
accounts, detail of, 236 
analysis of highway construc- 
tion, 227 
charts, 167 
daily report of, 247 
data, final disposition of, 248 

immediate use of, 247 
elements, 219 
factors influencing, 202 
fundamental divisions of, 261 
keeping, 128 

applied to highway construc- 
tion, 218 
blanks for building construc- 
tion, 338 
for dredging, 374 
for New York State Road 
Work, 436 
bookkeeping, difference be- 
tween, 129 
system for pipe line work, 
415 
conversion factors as an aid 

to management, 134 
defined, 129 
discussion of, 437 
objects of, 128 
records kept distinct from 

bookkeeping, 130 
on rock drill work, 359 
system, Aberthaw, 343 



Cost keeping system, applied to 

building construction, 

304 

to sewer work, 315, 336 

to street paving, 301 

for bridge and culvert jobs, 

532 
Fred T. Ley Co., 406 
Kosmos Engineering Co., 

427 
systems, 300, 464 
labor to equipment, reduction 

of, 192 
record, bridge, 517 

system on flood protection 
works, 379 
recording forms, street and 

sewer work, 525 
reports, daily, by whom made, 
140 
law of regular unit, 33 
summary, 254 
card of, 347 
system, essentials of, 230 
Costs, importance of daily unit, 47 
system for recording dredging, 

369 
total, definition of, 192 
Crews, sequence of, 204 
Crushed rock, punch card for, 315 
Curb report, 323 



D 



Daily report of costs, 247 
Data, gathering, 263 
Definition of contractor's economi- 
cal time, 191 
Depreciation, charges for, 222 

plant, 271 
Derrick, punch card for, 319 
Diary, foreman's, 151 
Differential bonus, the, 75 
Direct-expense account analysis, 261 
Distribution of expenditures, 274 
Drawing, key units on, 124 
Dredging, cost-keeping blanks for, 

374 
Drill holes, chart of, in quarry, 363 



INDEX 



569 



E 

Efficient of night work, 50 
Equipment Accounts, 281 
Estimate, analysis of, 471 

summary of, 470 
Estimating excavation yardage 

daily, 120 
Excavation, hourly report form of, 

562 
Expenditures, classification of, 231 

distribution of, 244 

F 

Fixed charges, 226 
Foreman's diary, 151 
Foremen, ten rules for, 564 
Forms (concrete) effect of slow con- 
struction on cost of, 202 
number of sets, 206 
reuse of, 206 
for breakwater construction in- 
cluding quarrying, concrete 
work and dredging, 388- 
405 
for keeping account of cars, 432 
miscellaneous, 295 
recording, 241 
of well-drilling costs, 364 

G 

Gang report cards, 145 
Graphic charts, 294 

H 

Highway construction, cost keeping 
applied to, 218 
cost analysis, 227 
History and sketches of work, 177 
Holding good men, a method, 63 

I 

Idle time, method of recording, 125 
Inspection blank, quarterly, for 

crane, 461 
Inspector's report, paving, 327 
reporting form,. 505 



Insurance, liability, 274 
Interest on plant, 273 

taxes and insurance, 225 



Job time recorder, 287 

K 

Key units on drawings, 124 
of measure, 123 



Labor cost to equipment cost, rela- 
tion of, 192 
Laborers, bonus for, 100 
Law of competition, 27 

coordination, 12 

management, 1 

operation, 8 

plant location and design, 3 
Layout adjusted to delivery routes, 

211 
Length, measurement of, 118 
Liability insurance, 274 
Listing machines, 290 
Location and design of plant, laws 
of, 3 



M 



Macadam, punch card for, 321 
Man days, distribution of, 207 
Management, laws of, 1 

a principle of, 42 
Managerial dignity, law of, 28 
Material record, 189 

and supply reports, 163 
Materials, construction speed limited 

by supply of, 203 
Measure, functional units of, 122 

key units of, 123 
Measurements of area, 119 

of length, 118 

stockpile, 123 

of volume, 120 

of weight, 121 



570 



INDEX 



Measuring the output of workmen, 
112 

Men required by schedule, 214 

Mimeograph, 289 

Minimum cost, rules for securing, 45 

Miscellaneous cost report blanks 
and systems of cost keep- 
ing, 300 

Motor truck operation, bonus plans 
for, 101-108 



N 



Night work, efficiency of, 50 

O 

Office appliances and methods, 284 

expense, miscellaneous, 274 

supplies, 270 
Operation code, 233 

laws of, 8 
Order system by card index, 295 
Output of workmen, measuring the, 

112 
Overhead, effect of slow construc- 
tion on, 202 

expense account, analysis of, 262 



Payment, premium plan, 76 

rules for determining bonus, 96 
systems of, 67 

by task work with bonus, 75 
Payroll, 332 

and pay systems, 188 
report, 546 

pipe laying, 418 
weekly, 264 
Performance, law of standard, 17 
monthly comparison of, 497 
of work applied to grading, a 
method, 190 
Photographs as records, 139 
Piece rate, principles governing, 76 
system, 67 

differential, 69 
Taylor, 69 
systems of payment, 67 



Piece work, increase in output by, 
80 
reduction in cost effected by, 
81 
Pipe, daily report, 417 

fitting, punch card for, 316 
line work, cost keeping for, 415 
Planimeter, 293 

Plant, Colt's, completed on schedule 
time, 207 
depreciation, 271 
interest on, 273 

laws of location and design, 3 
selection, 7 
Premium plan of payment, 76 
Profit sharing, 67 
Progress chart, 213, 333 

value in sinking shaft, 178 
charts, 173 
and cost chart, 176, 215 

report of, 252 
report, pipe laying, 419 
schedule, 210 
Price records, 269 
Principles governing the fixing of 

piece rate or bonus, 76 
Punch card, blacksmith, 155 
drilling, 154 
rock channeling, 157 
shop work, 156 
team, 152 
teaming, 153 

of time and occupation, 157 
cards, duplicate, 159 
Punches, kinds to use, 150 
Purchase order, 268 
requisition, 267 

and order, 269 
ticket, 534 



Q 



Quarrying, punch card for, 314 



R 



Receiving slip, 268 
Record, daily, hauling and expense, 
533 



INDEX 



571 



Record of explosives, 361 
form for material, 521 
of labor and materials, rail- 
road construction, 443 
material, 189 
stone, 387 
tool, 270 
Recording work of well drills, 432 
Reducing idle time, methods of, 125 
Repair, average cost of, 221 
Report blanks, miscellaneous, 300 
card system for dredging, 366 
cost clerk's weekly, 441 
of costs, daily, 247 
daily, 349 
blacksmith, 305 
blasting, 302 
brick paving, 310 
cement walk, 311 
channeling, 303 
concrete mixing, 307 
derrick, 306 
dredge tug, 367 
dump train, 301 
laying cast iron pipe, 308 
material, 354 
road construction, 434 
rock drilling, 304 
steam shovel, 300 
supply, 410 
time, 339, 344 
trenching, 309 
engineer's weekly, road con- 
struction, 435 
expense account, 355 
foreman's daily, 441, 504 

daily on paving, 325 
inspector's paving, 321 
material, 342 

paving inspection, daily, 304 
payroll, 546 

sheets, hourly on tunnel recon- 
struction, 561 
timekeeper's daily, 409 
Reports, checking accuracy of, 165 
law of regular unit cost, 33 
materials and supplies, 163 
storekeepers, 161 
Requisition blank, 452 



Research, law of systemic, 38 
Reward, law of prompt, 27 

of increasing reward with in- 
creased performance, 20 
Road culverts, punch card for, 320 
operation terms, definition of, 

255 
work, punch card for, 320 
Rock channeling efficiency chart, 
172 
drill work, cost-keeping on, 359 
drilling, punch card for, 318 
excavation, efficiency chart, 169 
Route sheet, 462 

Rules for construction superin- 
tendents and foremen, 561 
for securing minimum cost, 45 
ten for foremen, 564 



S 



Selection of plant, 7 

Separation of planning from per- 
formance, law of, 29 

Sewer work, cost keeping system 
applied to, 315, 336 

Slide rule, 293 

Slope wall, punch card for, 318 

Sodding, punch card for, 322 

Speed, economical in building con- 
struction, 201 

Steam shovel, punch card for, 312 

Stint system of payment, 79 

Stockpile measurements, 123 

Storekeeper's reports, 161 

Stores sheet, balance of, loose-leaf, 
463 

Street pavement base, punch card 
for, 321 
paving, cost keeping applied to, 
301 

Subdivision of duties, law of, 8 

Supervision, law of educational, 10 

Supplies, office, 270 

System, office, for construction work, 
179 

Systems of cost keeping, 300, 464 
of payment, 67 



572 



INDEX 



U 



Task work with bonus, 75 

Team card, 326 

Time, two methods of determining, 

192 
Timebook, 451 

dredging, 372 
Time cards that show changes of 

occupation, 142 
Time clocks, 284 
Timekeeper, hints for the, 137 
Timekeeper's book, 328 

field sheet, 480 

sheet, 408 
Timekeeping defined, 136 

sheet, 330 

stamp, 287 

studies on cableway work, 19 
Tool record, 270 
Transportation units, 116 
Trenching with cableway, punch 

card for, 313 
Tunnel driving under bonus system, 

92 
Typewriter, portable, 293 



Units of measurement, 229 
uniformity in, 115 
measuring, for concrete work, 

114 
of transportation, 116 



Volume, measurement of, 120 

W 

Wage bonus plan, application to 
construction, 86 
plan, fixing standards for incen- 
tive, 109 
rate, how to fix it, 78 
scale, efficiency, 110 
Weight, measurements of, 364 
Well drilling costs, forms for, 121 



Yardage, estimating daily excava- 
tion, 120 



D & 161948 



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